Another issue raised by MiFID2 on use of FX platforms

Another issue raised by MiFID2 is related to use of FX platforms. Only a limited number of corporate treasurers have noticed some provisions of the new Directive. If not properly interpreted, corporate end-users of platforms like FX-All or 360T would be unable to rely on the protections under art.2.1.d, despite those protections being initially designed for them. This article could force corporate end-users to become a licensed MiFID investment firm as they could be considered as a “member of or participants in a regulated market or an MTF (Multi Trading Facilities) or have direct electronic access to a trading venue”. This exemption for corporate end-users is crucial for dealing on these FX platforms. If this recital is applied as planned, it would render the original intention behind the “dealing on own account” exemption meaningless and would discourage corporate end-users from trading on regulated trading venues because authorization as a MiFID firm would bring corp’s into the scope of CRD4, requiring them to hold significantly more capital and reducing their ability to invest in growth. Discouraging treasurers from accessing regulated trading venues would run counter to the original G20 intention of migrating OTC trading onto regulated dealing venues to increase the transparency, efficiency and safety of those markets. EACT and treasurers request a clarification to distinguish corporates transacting on electronic platforms as users from “members or participants in a RM or an MTF” or having direct electronic access to a trading venue. We can easily imagine that these FX platforms will lobby to get things clarified and preserve exemption for treasurers. European treasurers should advocate similar position. We all use such FX platforms and in some cases, like mine, for 17 years. They became so useful and so performant that no one should prevent their use. Pragmatism is often missing when regulators try to define rules applicable to all without any exception or exemption. They should be advised to remain more pragmatic and to take into consideration best market practices and goals pursued by corporate treasurers. It is our duty at EACT (European Association of Corporate Treasurers) to defend such best market practices and tools. Hope we will be allowed to keep using such fantastic platforms in future.

Fran?ois Masquelier, Chairman of ATEL