This chapter compares the EU MiFID and the US Regulation National Market System (Reg NMS) and explores whether they could be accepted as equivalent by regulators on both sides of the Atlantic. Apart from many similarities, the most important one being that the main purpose of both measures is to enforce best execution in equity trading, there are also many differences in the definition of best execution, the structures of the markets, and the role and powers of supervisory authorities. It calls upon the European Commission to make a detailed comparison between both measures and to take the opportunity to negotiate a mutual recognition agreement on securities trading with the US.

Introduction

Two substantive pieces of legislation came into force on both sides of the Atlantic at roughly the same time – MiFID in the EU and Reg NMS in the US. Both aimed at updating regulation to reflect technological changes and market developments. Should this coincidence be taken as a sign of a well-functioning regulatory dialogue or of capital market integration? At the heart of each regulation is the introduction and specification of the best execution concept in securities transactions. MiFID intends to complete the process started with the 1993 Investment Services Directive (ISD) and further liberalizes Europe's capital markets, by abolishing the monopoly of exchanges. Reg NMS aims to modernize and strengthen the National Market System (NMS) for equity securities trading.