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Saturday, 13th April 2024
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Treasurers look for clearer MiFID distinction Back  
Non-financial institutions’ trading activites should not be inhibited under MiFID says ACT
The Association of Corporate Treasurers (ACT) has submitted a proposal to the European Commission arguing for a clear distinction between retail and wholesale customers under the Market in Financial Instruments Directive (MiFID).

MiFID’s aim is to protect investors and safeguard market integrity, but the ACT says that the Directive needs to distinguish between retail and wholesale clients, as its members ‘have generally had long experience of dealing in wholesale markets’ and ‘to restrict the activities of companies beyond the limits which the directors of the company believe appropriate would be regulatory overreach, an unnecessary and potentially costly restriction on enterprises’.

The ACT says that, in general, non-financial-sector companies should be able to choose to deal in instruments in the most liquid and administratively simple and lowest cost manner. ‘We do not regard dealing in financial markets as inherently more risky for non-financial sector companies than launching a new product or entering a new market. Nonfinancial- sector companies can be expected to equip themselves to deal in such markets as the directors find necessary or convenient in the context of their overall business’.

Large companies in the EU tend to have professionally staffed treasuries which are appropriately equipped to take advantage of the efficiencies speed of dealing and cost reductions available from Eligible Counter-Party status, says the ACT, and therefore such status should be available to as wide a range of companies as possible.

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