“I am not advocating a full-fledged recast of MiFID II even before the rules have entered into force. However, when MiFID II was negotiated, Brexit was nowhere to be seen on the horizon and the framework was developed based on an EU28 world. If the most developed and most liquid of all current EU markets is taken out of the equation, certain adjustments have to be made. The current calibrations of tick-sizes or the definitions of liquid markets are all based on EU28 data, which will no longer be valid after Brexit. Hence, targeted adjustments are inevitable if we do not want to render MiFID II meaningless. Most of those changes can be done via implementing legislation and would not even require opening up the core MiFID II text.
When it comes to elements such as open access, the Commission has to acknowledge this new reality, too. Therefore, I expect that Commission risk assessments, like the one recently conducted with regards to access provisions for exchange traded derivatives, are at least based on up-to-date figures and consider the impact of Brexit. Otherwise, they are meaningless in assessing risk. ESMA and the Commission will have to review and recalibrate a whole bunch of financial services files in the years to come - not because they are bad, but because the world will be a different one after Brexit. This should be common sense.â¤
