"Nous devrions accorder le bénéfice du doute à la directive MiFID"[en] 

The 30 October analysis recalls that MiFID (which entered into force in the EU on 1 November) "has long been synonymous with all that is worst in EU financial legislation", largely due to its complexity and the costs of compliance. 

Norman describes MiFID as a "daunting and sweeping" piece of legislation, designed to "create efficient markets, promote competition and provide EU-wide standards of investor protection". Its objectives appeal to those who believe that deep, liquid and well regulated financial markets help promote economic growth, he adds. 

MiFID widens the scope of EU legislation, involves greater harmonisation and improves the working of the Investment Services Directive's "passport" system for investment firms, allowing them to operate throughout the EU based on their home legislation, explains Norman. 

The directive should expand the range of trading venues for investors in a number of ways, he adds – including cross-border operation of multilateral trading facilities, which are low-cost platforms for equity and bond trading. 

MiFID will increase transparency by introducing "a comprehensive EU-wide pre- and post-trade transparency regime for equity markets", says Norman, with all trade on regulated markets having to be reported. 

Meanwhile, its rules on 'best execution' should promote competition and investor protection, and investors will be further protected by a "wide-ranging harmonisation programme". 

Norman concedes that implementing MiFID in 27 countries is "difficult (and) expensive", particularly as it requires major modifications to IT systems in investment firms. 

Moreover, there has been long-standing suspicion of MiFID from an early stage in the City of London, Europe's biggest financial centre, where it was feared that most countries' motivation for backing the directive was "thinly disguised protectionism", and there was resentment towards the increase in paperwork involved, he says. 

However, Norman explains that as the implementation date came closer, investment companies and banks began "manoeuvring to take advantage of the new rules", including creating new trading platforms designed to exploit the new opportunities. 

He concludes that if MiFID is given time, and seen alongside the prospectus and market abuse directives, then "its charms will be more apparent".