Moving towards a practical implementation of MiFID II and MiFIR

Posted on 11th June 2014 in News

The first Markets in Financial Instruments Directive (MiFID) came into force on the 1st November, 2007. The European Commission’s review of the MiFID framework following the global financial crisis has now culminated in the approval of Level 1 texts of a revised MiFID (MiFID II) and a new Regulation (MiFIR). The Level 1 texts were approved by the European Parliament on the 15th April, 2014, and by the Council on the 13th May, 2014. The Directive and Regulation adopted in pursuance of these amendments are set to come into force in June 2014.

 

On the 23rd April, 2014, the ESMA obtained a mandate from the EU Commission for technical advice on MiFID II and MiFIR. This mandate encompasses possible delegated acts and implementing acts to be adopted by the EU Commission. In this regard, on the 22nd May, 2014, the ESMA issued consultation documents aimed at facilitating the practical implementation of MiFID II and MiFIR.

 

The changes which will be effected to the Union’s financial markets as a consequence to the introduction of these two new pieces of legislation are somewhat extensive. These include: transparency requirements for a vaster array of asset classes; the duty to trade derivatives on-exchange; requirements on algorithmic and high-frequency-trading and new supervisory means for commodity derivatives. Retail investors will also see themselves being afforded more comprehensive protection due to limitation on the use of commissions; requirements pertaining to the provision of independent investment advice; more rigorous organizational standards for product design and distribution; product intervention powers and the disclosure of costs and charges.

 

So as to ensure that MiFID II satisfies its aims and objectives set out therein from a practical perspective, the EMSA has published the following two papers:

 

  1. Consultation Paper on MiFID/MiFIR Technical Advice
  2. Discussion Paper on MiFID/MiFIR draft RTS/ITS

 

In this regard, the ESMA is encouraging and welcoming feedback and responses in relation to the above papers from interested parties, including investment firms and credit institutions performing investment services and activities; trade association and industry bodies; institutional and retail investors and their advisors; consumer groups and any other market participant.

 

The deadline for receipt of all responses in relation to both papers is Friday 1st August, 2014.

 

For more information and assistance, please contact:

Dr Jean C Farrugia: jean.farrugia@dfadvocates.com (jean NULL.farrugia null@null dfadvocates NULL.com)

Dr Bradley Gatt: bradley.gatt@dfadvocates.com (bradley NULL.gatt null@null dfadvocates NULL.com)  

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