quinta-feira, dezembro 07, 2006

Mifid: FSA estimated Mifid could cost UK financial industry around 1b pounds

regulation Financial services face pounds 1bn charge for EU 'harmonisation'

Nov 25, 2006 - Daily Telegraph London
Author(s): Katherine Griffiths City Correspondent

BRITAIN'S financial services industry will have to pay about pounds 1bn to implement new rules intended to create a single Europe- wide market, according to the City's watchdog.

The Financial Services Authority (FSA) estimated the European Union's Markets in Financial Instruments Directive (MiFID) could cost the UK industry between pounds 877m and pounds 1.17bn, based on a survey of how much firms expect to spend on implementation.

Hector Sants, the FSA's managing director of wholesale and institutional markets, said: "It is clear that implementation of MiFID represents a substantial cost to industry, particularly in the upfront years.''

While there will be substantial initial costs, the FSA has calculated in the long run MiFID should save the financial services industry about pounds 200m a year. There should also be a pounds 240m benefit to the general economy.

The new EU rules are due to come into effect in November 2007 and aim to create a pan-European market in financial services that will provide greater transparency and value for money for customers.

They also aim to sweep away monopolies held by some stock exchanges, which has already helped spur a group of seven investment banks to start work on their own stock trading platform that will rival the London Stock Exchange.

The seven, led by Goldman Sachs and Deutsche Bank, will next year launch their own multi-trading facility (MTF). It will be a platform for investment banks and others to trade cash equities without using the LSE.

Under MiFID, domestic trades will not have to be reported on local exchanges.

The founding banks - the other five are Citigroup, Credit Suisse, Merrill Lynch, Morgan Stanley and UBS - have signed a memorandum of understanding.

The plan is to run European MTF as a not-for-profit utility with any savings passed on to users, who will potentially include private client brokers and other investment banks.

News of the banks' trading system prompted a serious slide in the LSE's shares. This spurred Nasdaq to table a new bid for the LSE on Monday.

Finance industry consultancy Atos Consulting said: "Although MiFID brings with it a significant one-off cost, it will also provide a stimulus that will prompt the European financial markets to examine their infrastructure and improve their overall efficiency.''

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