Global Correspondence

GFMA Affiliate Briefing Note – MiFID and Foreign Exchange

GFMA’s European affiliate, the Association for Financial Markets in Europe (AFME), authored a briefing note on the Markets in Financial Instruments Directive (MiFID), specifically in regards to foreign exchange.


The Markets in Financial Instruments Directive (MiFID) was designed to bring efficiency to the European Equity market through competition and to ensure that investor protection was consistently achieved across national boundaries. The MiFID review has now been significantly expanded and introduces new requirements for non‐equity products.

FX trading is a 24‐hour market that underpins international trade and investing. The $4 trillion per day market, its ubiquitous nature, and the simplicity of the vast majority of products mean that it has already developed into a highly transparent, liquid and deep marketplace. Market structures have similarly evolved to ensure access, transparent pricing and end user choice. Preserving these aspects are key to ensuring that such end users are able to hedge commercial risks efficiently and in a bespoke manner.

The proposed application of MiFID to FX should be carefully considered in the light of the market’s global nature and structure and that many of the objectives of MiFID are already met by the market.

We are concerned that a broad expansion of ‘equities‐style’ regulation to capture FX raises the risk of unintended consequences. We urge the Commission to review MiFID’s objectives in the specific context of the FX market to ensure that any measures are appropriately and efficiently tailored.


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