Britain’s departure from the European Union next March will force a full review of the bloc’s sweeping new rules for markets, including tougher market-access conditions for foreign trading platforms, a top French regulator said on Monday.
Robert Ophele, chairman of France’s AMF markets watchdog, said Brexit will force the EU to undertake a complete review of the so-called MiFID II rules.
“I don’t think there is a need for a major overhaul of MiFID, but clearly there are some quick fixes, some elements that should be adapted,” Ophele told a conference held by AFME, a banking industry body.
The MiFID rules, which run to hundreds of pages, were only introduced in January, a year late, because of the complexity and the cost for trading firms, banks and even regulators to implement them.
France is actively courting banks based in Britain that are opening EU hubs to avoid Brexit disruption, hoping they will base their trading operations in Paris.
Ophele said legislative fixes were needed to stop market participants circumventing the rules and to improve the quality of transaction data.
“MiFID II may be a complex piece of law, but that does not mean we should shy away from re-opening it and fixing deficiencies where evidence may show that we have gone too far or have generated unintended consequences,” Ophele told an industry event in London.
MiFID II has introduced caps on trading shares in the “dark” or away from transparent platforms like stock exchanges, but Brexit will mean that much of that trading will no longer be in the bloc.
“In the light of this, it makes sense to question whether MiFID II’s quantitative calibrations will be relevant tomorrow when the UK is no longer in the EU,” Ophele said.
Waivers from MiFID rules affecting commodities trading will also need to be revisited given that nearly all metals, oil and coal derivatives are traded in London, Ophele said.
MiFID allows trading firms based outside the EU to serve customers in the bloc if their home rules are aligned or “equivalent” to the bloc’s own regulation.
Ophele said that foreign firms should be made to comply with more of MiFID’s reporting and trading obligations for derivatives and shares in order to qualify, dashing UK hopes of an easing of the equivalence regime.
Brussels will only decide if a foreign firm is equivalent if it has cooperation agreements with its regulator. Ophele said firms should assume there will be such an agreement between supervisors in the EU and Britain’s Financial Conduct Authority.
Saudi Arabia To Invest 100m Euros In Africa’s Sahel Region
Saudi Arabia has pledged 100 million euros to support priority investment programs in Africa’s Sahel region.
Saudi’s state minister for African affairs Ahmed Qattan made the announcement at a donors meeting for the five-member Sahel group, held in the Mauritanian capital Nouakchott. The other countries making up the Sahel group are Burkina Faso, Chad, Mali and Niger.
NDIC Explains Why CBN Revoked Licences Of Micro Finance Banks And Mortgage Banks
The Nigerian Deposit Insurance Corporation has explained why the Central Bank of Nigeria revoked the licenses of 154 Micro Finance Banks and 6 Primary Mortgage Banks.
NDIC Managing Director, Umary Ibrahim, says the revocations took place because the entities were losing their capital base, they had poor liquidity, they had inept management, and that insiders gave themselves loans they did not intend to repay.
This explanation was given by NDIC controller of the Kano zonal office, Bashiru Nuhu, during the 2018 Kano International Trade Fair. Nuhu said depositors would be paid once NDIC had verified depositors and their claims.
South Africa Out Of Recession
Official figures released in South Africa show that the economy is no longer in recession. The country had plunged into a recession in the second quarter for the first time since 2009.
Statistics agency said on Tuesday, South Africa’s real gross domestic expenditure expanded by 2.3% in the third quarter of 2018 after contracting by 0.7% in the second quarter.
This comes as a boost to President Cyril Ramaphosa, who has been struggling to fulfill a promise to turn around the economy and create jobs at a time of mass unemployment.
Meanwhile, electricity utility Eskom has warned on Monday, South Africa faces more power cuts, as it sought to prevent the collapse of its power grid. Eskom implemented a fifth day of controlled power cuts on Monday, putting more strain on the economy months before a national election.
Eskom, which is battling a severe financial crisis, coal shortages and breakdowns of its power plants, says it would cut up to 2,000 megawatts of power from the grid.
South Africa senior economist Jeff Schultz says prolonged power cuts would likely hurt economic growth in the first quarter of 2019.
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