New EU securities rules off to a smooth start

london — The rollout of new European Union securities rules on Wednesday has been glitch-free so far, though disruptions in coming days and months cannot be ruled out, the bloc’s markets watchdog said.

“What we can see for our part, is no glitches so far,” Steven Maijoor, chairman of the European Securities and Markets Authority (Esma), told reporters.

But given the complexity and size of the reform, Esma could not rule out glitches in coming days or weeks, Maijoor said.

The new rules, known as Markets in Financial Instruments Directive II (MiFID II), were delayed by a year to Wednesday to give banks, asset managers and exchanges time to get ready.

“We think sufficient time has been given for all to be prepared for MiFID II,” Maijoor said.

Regulators in Britain and Germany intervened just hours before the rollout began to give three clearing houses an exemption until July 2020 from opening themselves up to more competition.

Maijoor said this would be a “one-off” waiver and the new requirements for clearing houses would come into effect in 2020.

Under the new rules, trades in financial

There was little sign of an impact on trading volumes this morning Martin Van Vliet, ING senior rates strategist

assets and instruments must all be logged in a repository, forcing banks, asset managers and traders to report detailed information on trillions of euros of transactions.

The initial impact of the new regulatory regime was limited. “There was little sign of an impact on trading volumes this morning,” said ING senior rates strategist Martin Van Vliet.

The new rules were delayed by a year due to their complexity, and regulators have had to issue eleventh-hour guidance to banks and financial firms to avoid trading freezes as well as calming nerves of those not yet fully compliant.

The strong momentum in the Eurozone economy was reinforced by data that showed Germany’s jobless total fell more than expected in December.

Euro area borrowing costs held near recent highs on Wednesday, after hawkish comments by ECB rate-setters and as a sweeping reform of EU financial market rules took effect.

The European Central Bank may end its bond buying programme this year if the Eurozone economy continues to grow strongly, rate-setter Ewald Nowotny told a German newspaper in an interview released late on Tuesday, echoing comments by ECB board member Benoit Coeure at the weekend.

Yields on 10-year German government bonds traded near two months highs on Wednesday at 0.456 per cent.

Most other core Eurozone yields were flat to a touch lower, having risen sharply on Tuesday. — Reuters