Financial Regulatory Forum

EU regulators propose tougher off-exchange rules

By Huw Jones

LONDON, April 13 (Reuters) – Banks and brokers in the¬†European Union that manage share trades for clients in-house to avoid the cost of using a stock exchange face a crackdown under reforms proposed by the bloc’s regulators on Tuesday.

Bourses have been lobbying supervisors for months to impose tougher rules on their off-exchange trading rivals, particularly crossing networks inside big banks that match share orders even though it represents a fraction of the market.

The EU is reviewing its markets in financial instruments directive, or MiFID, which has sparked cross-border competition in trading since its introduction in 2007 but at the cost of fragmenting share prices for investors.

The Committee of European Securities Regulators (CESR)

launched a consultation on three sets of draft advice to the EU for reforming MiFID later in the year.

“Ensuring that the regulatory framework keeps pace with the changing shape of financial markets is key,” CESR Chairman Eddy Wymeersch said in a statement.

EU starts rollout of share short-selling regime

By Huw Jones

LONDON, March 2 (Reuters) – Securities regulators in the European Union said on Tuesday they will start rolling out requirements for reporting net short positions in shares as part of wider efforts to improve transparency in markets.

Short selling of shares is a practice favoured by hedge funds and involves selling a stock that is not already owned, in the hope its value will fall by the time a purchase is required to settle the trade. The difference in price is pocketed as profit.

Interim short selling curbs were introduced by some EU states in late 2008 when bank shares came under pressure, but regulators want a single, bloc-wide regime to end confusion among investors.

Global accounting body told to improve governance

By Huw Jones

LONDON, Feb 8 (Reuters) – The world’s most influential accounting rule setter is not answerable enough to users or the public and must improve its governance further, top financial regulators said on Monday.

International Accounting Standards Board (IASB) rules are used in over 100 countries, including the European Union, with Canada, Japan and Brazil adopting them as well. The United States, however, is still mulling its position.

The IASB will become more powerful next year when its rules form the basis for a single set of global standards as called for by the G20 group of countries, sparking calls for the London-based body to be more accountable and transparent.