No one gets excited by financial regulation, right? It’s hard to disagree with that sentiment, but with the European Parliament last week reaching the final agreement of the revised Payment Services Directive, known as PSD2, a number of entrepreneurs in Europe’s financial technology community will be rubbing their hands with glee. The reason is that PSD2 threatens to usher in a radical transformation of the banking and payments market throughout the European Union.
One man makes a difference.
Today the European Court of Justice voided the “Safe Harbor” agreement, which allows the personal data of European Union citizens into a U.S. firm if the firm pledges to adhere to EU standards. The agreement inhibits Europe’s regulators from intervening on behalf of EU citizens who feel their privacy is compromised. The court is also concerned about U.S. authorities’ “mass and indiscriminate surveillance.”
Buried in the European Securities and Markets Authority’s 402-page Draft Regulatory and Implementing Technical Standards MiFID II/MiFIR just out September 28 is this little nugget on the esoteric subject of security identifiers:
“After reviewing all the existing industry initiatives for reference data, ESMA has decided to use ISINs to identify reference data, given the open source nature and the low cost of the solution as well as the flexibility and speed with which ISINs could be allocated to existing/new financial instruments.”