LONDON — The boss of one the world’s biggest exchange groups said that the upcoming MiFID II rules for financial services companies are “the worst piece of legislation” he has seen in his decades-long career.
Jeffrey Sprecher, the founder, chairman, and CEO of Intercontinental Exchange said that implementing MiFID II — which comes into force at the beginning of 2018 — is “daft,” especially when put in the context of Britain’s impending departure from the European Union.
“Not to sugarcoat it, I think it [MiFID II] is the worst piece of legislation I’ve ever seen in the history of my career,” Sprecher told the audience at a panel discussing the future of the City of London’s role as an international hub for clearing after Brexit.
“MiFID II was Europe’s answer to the G20 commitment [to increase oversight of the finance industry], but in addition to that, people who were elected decided also to add a whole bunch of other things to that legislation to deal with competition, and to break down barriers to competition, which is another way of saying to create fragmentation.”
MiFID II, at its most basic level, is a series of rules designed to create a European-wide legislative framework for regulating the operation of financial markets. It is particularly concerned with ensuring investors are protected, and making sure competition is increased. In the context of Brexit, MiFID II rules look like a terrible idea in Sprecher’s eyes.
“At a moment in time when the UK and EU are trying to figure out their capital relationship, to also overlay a forced fragmentation of markets — when the Brexit vote itself may be a forced fragmentation of the markets,” is unwise, Sprecher said.
“To go forcing ahead with some sort of competitive landscape restructure just seems daft to me.”
Intercontinental, the parent company of the New York Stock Exchange, is the world’s third-largest exchange group, and has frequently been rumoured to have an interest in buying the London Stock Exchange in recent years. Those rumours have resurfaced since the LSE’s merger with Deutsche Boerse collapsed.
Asked on Wednesday about any potential bid for the UK’s biggest exchange, Sprecher laughed before saying: “I can’t answer that.”