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Groups to work on implementation of ISD II Back  
The Committee of European Securities Regulators (CESR) has been charged with advising the Commission on possible technical measures, or Level 2 measures, to implement the proposed Financial Instruments Markets Directive (FIM), which will revise the existing Investment Services Directive (ISD).
TThe FIM will form the cornerstone of the EU’s securities regulatory regime, and is intended to deliver an effective ‘single passport’ allowing investment firms to operate across Europe. CESR has issued a Consultative Concept Paper collecting comments from all interested parties at an early stage before the draft of a consultative paper, due to be approved by CESR in June, is drawn up. Three working groups have been established to assist CESR in drawing up technical advice:

Co-op and Enforcement: This expert group has been formed to cover the provisional mandates related to: transaction reporting, co-operation between competent authorities and exchange of information.

Intermediaries: This expert group has been formed to cover the provisional mandates related to: organisational requirements; conflicts of interest; conduct of business obligations when providing investment services to clients; best execution; client order handling rules, with particular regard to prompt, fair and expeditious execution of client orders.

Market Transparency: This expert group has been formed to cover the provisional mandates relating to: the admission of financial instruments to trading; pre-trade transparency requirements for multilateral trading facilities (MTFs) and regulated markets; post-trade transparency requirements for MTFs and regulated markets; post-trade disclosure by investment firms.

In addition, a steering group has also been established. The group consists of the three chairmen of the experts groups and is chaired by CESR’s chairman, Arthur Docters Van Leeuwen.
A consultative Working Group of market participants has also been appointed to provide technical advice to all three expert groups. There are two Irish participants in the group, Brian Healy, director of trading with the Irish Stock Exchange, and Louise McBride, research journalist, Consumers Association of Ireland.

As reported in FINANCE January, the Irish financial services industry had a number of issues with the earlier version of the Directive, which was seen as being too ambiguous and unworkable.

Healy says that the biggest issue remains Article 27, which deals with pre-trade transparency. The Department of Finance is currently working with the Commission on drafting the Directive. The European Parliament will vote at the second reading of the Directive sometime in March. Member States will have to comply with this directive two years after its entry into force.

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