MiFID II is expected to come into effect from January 2018 and is predicted to improve the functioning of the UK’s financial markets.
To help understand what changes MiFID II is likely to have on the financial market, Specialist Banking has produced a guide as to what to expect.
What is MiFID?
MiFID, otherwise known as the Markets in Financial Instruments Directive, is the European Union legislation that regulates firms that provide services to clients linked to financial instruments.
These instruments include shares, bonds, units in collective investment schemes and derivatives.
MiFID was applied in the UK from November 2007, but is now being revised to improve the functioning of financial markets in light of the financial crisis and to strengthen investor protection.
What changes will we see in MiFID II?
MiFID II is aiming to enhance the efficiency, resilience and integrity of the financial markets.
It hopes to achieve greater transparency with the introduction of a pre- and post-trade transparency regime for non-equities, as well as strengthening and broadening the existing equities trade transparency regime.
It is also looking to bring more trading on to regulated venues.
Additionally, it will strive to facilitate access to capital for SMEs through the introduction of the SME Growth Market label.
Improved protection for investors is also a main priority with the enhancement of the rules on inducements, a ban on inducements for independent advice and new product governance rules.
Finally, MiFID II hopes to level the playing field in financial markets and to enable them to work for the benefit of the economy, supporting jobs and growth.
Who should be concerned by MiFID II?
MiFID II is expected to impact a wide range of financial businesses.
The Financial Conduct Authority (FCA) said these range from firms it authorises and recognises, as well as unregulated entities trading commodity derivatives.
• investment firms
• interdealer brokers
• investment advisers
• corporate finance firms and venture capital firms
• investment managers, including individual and collective portfolio managers
• financial advisers
• local authorities
The FCA has said that firms should start planning for the MiFID II changes ahead of the finalisation of the EU implementing legislation and the subsequent changes that it and the Prudential Regulation Authority will be making to their handbooks, as well as the changes made by HM Treasury.
Has MiFID II been approved?
The FCA is currently consulting on its third set of implementation proposals for MiFID II and seeking views on its proposed changes to its handbook.
Those impacted by the changes have until 4th January 2017 to send over any comments.
The FCA will then consider the feedback and publish its rules in a policy statement in the first half of 2017.
MiFID II will then take effect on 3rd January 2018.
To provide feedback to the FCA email email@example.com or visit its website.
SIGN UP TO OUR NEWSLETTER TO RECEIVE MORE NEWS LIKE THIS STORY
Handelsbanken names new head for northern UK arm
Ingela Forsberg is set to become the new head of Handelsbanken Northern UK.
Tesco Bank expands mortgage intermediary panel
Tesco Bank has added Sesame to its mortgage intermediary panel.
Emma integrates with Monzo
Emma Technologies has integrated with mobile bank Monzo as it makes its first Open Banking partnership.
Commercial mortgage brokers positive despite Brexit concerns
Almost four-fifths of commercial mortgage brokers (78%) said they felt confident about the lending environment in 2018, up from 72% in 2017, according to new research.
Metro Bank names new commercial banking director
Metro Bank has appointed Jamie Sim (pictured above) as a commercial banking director within the commercial real estate team.
The launch of Open Banking
The launch of Open Banking at the weekend is clearly an important milestone in opening up the UK retail banking industry to much-needed competition.
Aldermore appoints specialist vehicle valuations head
Tim Bearder has joined Aldermore as its new head of specialist vehicle valuations.
Millennial banking app secures FCA approval
Emma Technologies Ltd has received approval from the FCA.
Open Banking goes live: industry reacts
The launch of the Open Banking scheme last week has presented many opportunities, but as one bank has stated, data sharing alone will not revolutionise the market.
EIB and Bankia to allocate €800m to SMEs and mid-cap projects
The European Investment Bank (EIB) has agreed a €400m loan with Bankia which will provide finance for Spanish SMEs and mid-cap (up to 3,000 employees) projects.