A group of 11 UK trade associations have banded together to influence the way the European Union's Markets in Financial Instruments Directive (MiFID) is implemented following fears that City regulators could take an "overly stringent approach" to the new measures, says the FT.
According to the Financial Times report, the associations party to the "highly unusual co-operative effort" include the Association of British Insurers, the British Bankers' Association (BBA), the Investment Management Association (IMA) and the London Investment Banking Association (Liba).
Mifid, which takes effect in November 2007, has been finalised in Brussels but uncertainty remains over how the UK's Financial Services Authority (FSA) will interpret the directive.
The FT says the 11 financial trade associations, which have formed an entity called Mifid Connect, are lobbying to establish a "practical, cost-effective and market-sensitive policy" on the directive's implementation. They hired law firm Clifford Chance to compile a 'Mifid Survival Guide', which is on sale for £1100.
Angela Knight, chief executive of the Association of Private Client Investment Managers and Stockbrokers (Apcims), told the FT that the UK had a history of implementing European directives "more restrictively than other member countries".
She says it is much better "if the pen that writes the guidance is in the hands of industry and not the regulator".
The associations are aiming to develop guidelines in the areas where Mifid carries a high degree of legal uncertainty and regulatory risk, says the report. The directive will also affect the disclosure of information on stock trades, the management of conflicts of interest and the assessment and classification of client needs.
A number of trade bodies - including the International Capital Market Association (Icma), the International Swaps and Derivatives Association (Isda) and The Bond Market Association (TBMA) - have already criticised the FSA's controversial suggestion that banks use price benchmarks to demonstrate best execution in OTC and fixed income markets. According to Liba this issue has also resulted in many firms stopping work on the implementation of MiFID.
The FSA also stated recently that plans to harmonise disclosure rules for large trades under MiFID could end up reducing the transparency of the London Stock market.