In a speech in Dublin last Friday, Charlie McCreevy, European Commissioner for Internal Market and Services, welcomed the competitive pressures being placed on existing European exchanges. In his opening remarks at a conference on the Markets in Financial Instruments Directive (MiFID) organised by the Institute of European Affairs, the think tank dedicated to Irish policy on European integration, McCreevy saw profound changes for exchanges. He said "in many countries they face competition from other trading venues for the first time. Competition from other Member States will also be ramped-up significantly."
McCreevy said that, subject to competition rules being fully respected, he anticipated that the economies of scales realised would bring benefits to users and shareholders alike and potential increased innovation in terms of the products and services. Possibly acknowledging the current activities by the NYSE and other exchanges in cross-border mergers of exchanges, he added, "There could also be interesting knock-effects. In the same way that regulatory change produces change in the market, so change in the market can lead to regulatory changes. There are, of course, sensitivities as to the regulatory regime which would apply should mergers take place – particularly trans-Atlantic mergers. But, in the long run, the result could be a convergence of different regulatory cultures and greater trading possibilities for investors. And this would be welcome."
MiFID is currently in the final stages of regulatory detail having been endorsed by the European Parliament on June 15th and unanimously approved by European Securities Committee. Final approval is expected in September and the Directive will become operational on November 1st next year.
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