EU to hold marathon talks on new securities law

Tue Dec 3, 2013 7:08pm EST
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By Huw Jones

LONDON (Reuters) - Negotiations over sweeping changes to European Union securities market rules enter what may be the final stretch on Wednesday with several key elements already agreed.

The bloc's Markets in Financial Instruments Directive or MiFID is being updated to reflect rapid advances in trading technology and apply lessons from the 2007-09 financial crisis to stock, bond and derivatives markets.

The European Parliament and EU states have joint say on the final shape of the law and representatives from both sides have set aside over six hours to hammer out an outline deal.

In earlier meetings agreement was reached on curbing anonymous or "dark pool" trading and supervising high-frequency or ultra-fast trading.

There is also agreement on a new breed of trading platform, known as an organized trading facility or OTF for trading off-exchange swaps contracts, the EU's counterpart to the new U.S. organized trading facilities which are already up and running.

Wednesday's meeting will seek a deal on remaining contentious issues, such as who should be responsible for imposing curbs known as position limits on commodity derivative markets to stop any one trader holding too much sway.

Policymakers have insisted on such curbs to stop what they see as speculators pushing up food and energy prices.

Many EU states want national authorities to have the responsibility but parliament would like the bloc's securities watchdog, the European securities and Markets Authority (ESMA) to have the upper hand.   Continued...

A laser beam touches the Gherkin from the Shard during the laser and searchlight show which marks the completion of the exterior of the Shard building in central London July 5, 2012. REUTERS/Olivia Harris