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French Watchdog Says EU Market Rules Need Overhaul After Brexit

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French Watchdog Says EU Market Rules Need Overhaul After Brexit

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.

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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.

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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.

TOUGHER EQUIVALENCE

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.

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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.

Business News

Boeing Shares Continue To Slide As Countries Ground 737 MAX Planes

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Boeing Shares Continue To Slide As Countries Ground 737 MAX Planes

Boeing shares have continued to slide on Tuesday as a growing list of countries move to ground the aircraft manufacturer’s 737 MAX model jets after the crash of an Ethiopian Airlines flight on Sunday killing a hundred fifty-seven persons.

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Boeing’s stock price has fallen nearly twelve percent since the accident, erasing roughly twenty-eight billion dollars in value amid concerns the accident could have links to last October’s crash of a 737 MAX 8 operated by Indonesia’s Lion Air. A hundred eighty-nine persons died in that one.

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Although experts warn that it’s too early to know what caused the Ethiopian Airlines crash, both crashes occurred shortly after takeoff. Experts say, that suggests a possible connection.

Bloomberg reports the Boeing 737 is the best selling aircraft in history.  The MAX is its newest version, with more fuel-efficient engines.  It is also generates almost one-third of the airline maker’s operating profit.

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SA Banks Stop Supply Of US Dollars To Zimbabwe

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SA Banks Stop Supply Of US Dollar To Zimbabwe

South African banks have stopped supplying Zimbabwe with U.S Dollar notes saying they want to avoid risk. They cite Zimbabwe`s loss of a hundred correspondent banking relationships in the past few years because of the country`s high risk rating.

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South African banks have been the major sources of U.S dollars for Zimbabwe since 2009.

Zimbabwe Reserve Bank Director, William Wanimanzi says the development is a result of the country`s failure to follow proper dollarization procedures, signs of which he said are now catching up with the country`s fragile economy. He said the country is not officially dollarized because it does not have an agreement with the United States government to use its currency. He says this will make it difficult to take in cash into the economy.

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African News

Zimbabwe Central Bank Abandons Quasi Dollar

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Zimbabwe Central Bank Abandons Quasi Dollar

Zimbabwe Central Bank has abandoned the quasi dollar it introduced in 2016.  The peg of one Zimbabwe dollar to one US dollar has not worked as the black market rate has been in the range of three and a half to four Zimbabwe dollars to one U.S. dollar.

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Economists say this move could lead to jitters in countries that hold the peg, including Saudi Arabia and Hong Kong.

Zimbabwe has long been dealing with currency instability that in 2009, it introduced the US dollar, euro, and the South African rand as legal tenders it thought would stem the wild round of hyper-inflation.

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