Welsh Conservatives in the European Parliament
Dr Kay Swinburne MEP

Markets in Financial Instruments Directive, Strasbourg 13.12.10

I have had difficulties explaining to those un-initiated in financial jargon precisely what my report on 'dark pools' actually refers to - in my group it has been referred to as the "swimming pools report" on more than one occasion. The report formally refers to the trading of financial instruments and includes dark pools which are financial transactions in shares conducted without pre-trade transparency - otherwise referred to as non-displayed trades. It is an assessment of the implementation of the Markets in Fianncial Instruments Directive of 2007 with respect to equities and seeks to address structural issues currently apparent in the equity markets.
Despite this being highly technical I am encouraged by the high level of debate that has been had in the committee and am glad that the hard work of my colleagues has managed to establish a broad base of support across political groups - turning 194 amendments into 26 compromises most groups were able to sign up to.
Given the timing of the INI report and its culmination in plenary this week, I also believe that the European Parliament has added significantly to the Commission's recently released consultation on the MiFID review - or MiFID II, which takes into account many of the issues raised in deliberations in the Parliament.
The EP, through this report, has asked for a number of investigations into the different trading venues that are currently regulated under MiFID and seeks a closer analysis to ensure that venues providing equivalent services are regulated to an equivalent level. I believe that the Commission in their consultation document may have gone a step further. In widening it's definition of organized trading facilities to include all venues that bring together buyers and sellers a significant loophole would be closed- yet this solution would ensure that proportionality would be maintained in allowing for significant differentiation within the categories for regulated markets, MTFs, SIs, BCNs and derivatives platforms.
The new level of scrutiny being suggested for operators of "dark pools" should be welcomed by investors as while they currently provide protection from the wider market they at least have the potential for abuse. Allowing regulators full access to business models should ensure that they can continue as a venue for the discretionary crossing of client orders without allowing them to expand to proportions that will affect price discovery, or provide a cover for market abuse.
As important as the relatively modest proportion of trading that takes place in private BCNs are those that are conducted under the current MiFID waivers. Both the EP and the Commission agree that these need refining and their implementation needs standardizing across the EU - the possibility to arbitrage across EU member states to find the best interpretation of the same rule should no longer be a possibility.
During the compilation of this report and its amendments it is clear that the biggest deficit in MiFID implementation has been the lack of a market version of a consolidated tape emerging. Investors in the US cannot understand how we in the EU operate without such a tool. There has been a general industry acceptance, particularly among investor groups of its necessity but in the years since MiFID implementation market participants have failed to come together to provide it.
Like the Commission, the ECON Committee is reticent to go beyond mandating the Approved Publication Arrangements, or APA regime - it is something that there seems such an obvious cost effective market solution to that it will be a market failure should we eventually have to legislate for it. Yet by extension it is an embarrassment that an industry as innovative as the financial services industry hasn't come up with one. If market solutions aren't found an shortly embraced I am in full agreement with the Commission that legislation will then be the only option.
The micro structural issues currently affecting the equity markets have been a topic of heated debate in committee. There has been agreement that practices like flash orders, spoofing and pinging are unfair or even abusive however the committee found it much harder to come to an agreement on the role of certain market participants and the fundamental costs and benefits of high frequency trading strategies. However in absence of clear data it is difficult to draw any solid conclusions on the role, positive or negative and so data collection and analysis by the regulators must remain a priority before we propose legislative actions which may be detrimental to the effective functioning of European markets.
The Commission in its consultation has responded to our call for more data, investigations and further studies. It explores introducing Trader IDs and the marking of trades where investment decisions are made by algorithms, however their suggestions to bring in minimum resting periods or enforced latency is a step beyond the committee proposals and in the absence of clear evidence could undermine liquidity and market efficiency.
The European Parliament's concern over the US flash crash has been directly addressed by the Commission in their inclusion of a coordinated set of circuit breakers across platforms in the EU, as well as tests of electronic systems and justifications of algorithms to regulators.
Fundamentally we must ensure the integrity our financial markets - they are not there for the intermediaries or the interlopers to interact with one another but are there to provide a market place for investors to channel capital to businesses and corporates who act in the economy - this fundamental function of the market must be kept centre stage in all of our minds as we go through the legislative process of MiFID II.
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Welsh Conservatives

The European Commission has today designated European Protected Geographical Indication (PGI) status to the well-known Pembrokeshire Early Potato from West Wales.
The Pembrokeshire Early Potato was one of only three quality farm products whose applications for PGI status were approved today.
The EU PGI schemes protect product names against misuse and under these schemes more than 1200 products are already protected.
Commenting on this announcement from the European Commission today Dr Kay Swinburne MEP – who is from West Wales - said:
"I am delighted to see that this application to have "Pembrokeshire Earlies" added to the register of PGI products has been approved by the European Commission today."

"Achieving this prestigious status is a clear acknowledgment of the high-quality and distinctive produce we continue to deliver in Wales. Pembrokeshire Early Potatoes thoroughly deserve their place alongside the well-known food and drink products from right across the EU which already feature on the PGI register."


Kay was delighted to host an event to celebrate Higher Education, Science and Innovation in Wales last night in the European Parliament.  The event builds on the British Council’s “Strategic Analysis of the Welsh Higher Education Sector, Distinctive Assets”.  A number of experts spoke to share their views of Welsh HE at the event and how it can develop in the future.

In advance of the 'Fox-Hafner Report' vote on the single seat for the European Parliament, Kay and the other UK Conservative MEPs feel it is right to draw attention to the fact that the seven-year cost of the dual-seat arrangement comes to £928,000,000. Since her election to the European Parliament in 2009, Kay has strongly supported bringing the monthly Parliamentary meetings in Strasbourg to an end and therefore saving taxpayers a considerable sum of money.


Kay was delighted to meet Malala Yousafzai, who was awarded the EU's Sakharov Human Rights Prize at the European Parliament today.

Following Malala’s speech to the European Parliament, Kay said, “What an inspirational speech Malala gave to the Members of the European Parliament today. As a mother of young children myself, I hope that they can also aspire to achieve like her. Malala is an exceptional young lady who has overcome adversity by tremendous force of character and a passionate belief in the right of everybody to enjoy and benefit from education.”   


Kay was very pleased to meet with members of the Advanced Manufacturing Research Group at the European Parliament in Brussels, one of four groups set up in key Welsh research strengths to engage with EU research funds. The delegation visiting Brussels included representatives from Cardiff University, Bangor University, Swansea University and Trinity St.Davids University.

In advance of tomorrow's European Council meeting of leaders, Dr Swinburne has echoed the recommendations made in a recent report published by a number of business leaders, which highlights the importance of removing barriers to business competitiveness in Europe and getting rid of burdensome legislation by cutting EU red tape.

Last year Dr Swinburne encouraged businesses in Wales to highlight to the European Commission which over-burdensome regulations they would like to see slashed, by writing to small businesses all over Wales and asking them to tell her their red-tape problems.

Electronic cigarettes no longer face being taken off the shelves by the EU after Conservative MEPs were successful today in amending EU legislation on tobacco labelling.

Conservative MEP's led the amendment to defeat proposals that would have classified e-cigarettes as medicinal products, meaning they would have to undergo an overly burdensome and costly authorisation procedure, which would go beyond the procedures for traditional tobacco products... (Read more under 'Articles')



Welsh Conservative MEP Kay Swinburne has been sitting down with leaders in Europe's biotech field to choose the top five candidates to compete in this year's EuropaBio Most Innovative EU Biotech SME Award.

As a member of this year's judging committee, Kay is once again supporting the EuropaBio award, which has attracted applications from all three sectors of biotechnology - healthcare, industrial and agricultural, from across the EU... (Read more under 'Articles')


WELSH Conservative MEP Dr Kay Swinburne today hailed a vote in the European Parliament as a "wake-up call" in the battle to save Europe's endangered languages.

MEPs meeting in Strasbourg backed a report which calls on governments across the EU to develop action plans to encourage continued linguistic diversity.

The report, written by Corsican MEP François Alfonsi, also says governments should be "more attentive" to threats which may lead to languages becoming extinct.

Dr Swinburne, who was a shadow rapporteur for the report, has argued that Welsh can be seen as a positive example of language revitalisation which communities across the EU should follow... (Read more under 'Articles')

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