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Brussels, 13 November 2006

Internal Market: feedback statement on transparency in bond markets and other non-equity markets

The European Commission has published a feedback statement in response to its call for evidence on transparency in the bond markets and other non-equity markets. The feedback statement relates to a report that the Council of Ministers and the European Parliament have asked the Commission to make by end 2007. It will investigate whether and to what extent new requirements on pre- and post-trade transparency should be introduced at EU level to the trading in non-equity financial instruments such as bonds and derivatives. All interested stakeholders, including industry and individuals, were encouraged to reply to the call for evidence. The closing date was 15 September 2006.

Internal Market and Services Commissioner Charlie McCreevy said: "These are massively important markets – so the Commission is carrying out scrupulous, fundamental research as part of the better regulation approach. I note there has been a good response from 59 respondents from all parts of the EU and internationally. As we work towards defining our position we will take careful account of the views of the various legitimate interest groups and will only act in this area if we see a compelling case to do so that would materially benefit the operation of the market without harmful side-effects."

Broadly, most industry feedback was to the effect that the MiFID transparency provisions that apply to equities should not be extended to apply to other instrument types such as bonds and derivatives. On the other hand, there was industry support for exploring the possibility of self-regulatory measures to improve transparency, particularly for retail investors. There was some support expressed by regulators, exchanges and consumer representatives for mandatory transparency to be extended to non-equities. Lastly, there were a number of suggestions for enhancing non-trade transparency in a number of markets.

The Commission is required by Article 65(1) of the Markets in Financial Instruments Directive (2004/39/EC), known as 'MiFID', to present a report to the European Parliament and the Council by the end of 2007 concerning pre- and post-trade transparency obligations to transactions in classes of financial instrument other than shares.

The next steps are that the Commission services will consult with the Committee of European Securities Regulators (CESR) and with the European Securities Markets Expert Group (ESME) for specialist technical advice and assistance. CESR and ESME will be asked to react to the findings of this feedback statement, The mandates to these bodies will be made public on the Commission’s website shortly. Following that phase, the Commission will draw up a draft report due to be published in July 2007. The draft report will be subject to a public consultation and discussed at a hearing in Brussels on 11 September ahead of the finalisation of the report.
The feedback statement is available at:
More information on MiFID is available at:

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