The Europe Union is to tighten regulation of financial markets under a
deal to prevent any repetition of the rampant speculation which helped
bring down banks and crash the global economy.
After two years of tough talks, the European Parliament and negotiators for the 28 member states agreed a deal in principle that sets new rules to regulate the market, known as MiFID II.
Read more: Europe tightens up financial market rules - Yahoo News
After two years of tough talks, the European Parliament and negotiators for the 28 member states agreed a deal in principle that sets new rules to regulate the market, known as MiFID II.
"These new rules will improve the way capital markets function to the
benefit of the real economy," said the EU's Financial Markets
Commissioner Michel Barnier.
"They are a key step towards establishing a safer, more open and more
responsible financial system and restoring investor confidence in the
wake of the financial crisis."
Barnier first pushed for the new rules in 2011 at the height of the
eurozone debt crisis which was sparked by the 2008 global financial
crash.
They aim to curb speculative trading in commodities and to regulate
high-frequency trading so as better to protect investors and make the
markets less crisis prone.
They will apply to investment firms, market operators and services
providing post-trade transparency information in the European Union, a
parliament statement said.
They will notably force market players to buy and sell financial
instruments on regulated markets comparable to stock exchanges to
ensure that all trading is tracked by MiFID.
International aid group Oxfam welcomed the deal but warned of the
dangers of exemptions, especially for Britain which is home to one of
the world's largest financial markets in London.
"Today's decision marks a good start in tackling 'gambling' on food
prices which are a matter of life and death to millions," Oxfam said.
But "the deal is far from perfect," Oxfam said." Unjustified exemptions
were granted to powerful lobbies and limits will be set nationally,
rather than at the European level.
"There is a real risk, particularly in the UK, of ineffective sky high
limits triggering a regulatory race to the bottom between European
countries," it said in a statement.