MiFID II / MiFIR Services

MiFID II / MiFIR Services

The MiFID II “package” (MiFID II, MiFIR and delegated regulation such as the MiFID Org Regulation) came into effect on 3rd January 2018.

The original Markets in Financial Instruments Directive (MiFID) was implemented on 1st November 2007, however over time it was felt to have become outdated as there were:

  • Regulatory gaps needed to be filled
  • Increases in the use of new technology in investment services; in particular algorithms were seen as capable of contributing to disorderly markets and potential abuse
  • Calls for a more level playing field in some areas, which have resulted in the introduction of organised trading facilities as a new type of trading venue, the more equal treatment of regulated markets & multilateral trading facilities and the extension of the transparency & systematic internaliser regimes to all asset classes
  • Concerns about the generosity of exemptions available for firms trading in commodity derivatives and the integrity of the emission allowance market – tightened up including with the introduction of position limits
  • Perceptions that firms had not taken some of the conduct requirements sufficiently seriously – enhanced from MiFID standards, often by articulating more clearly what regulators expect
  • Important new requirements around product governance, intervention and recording of telephone conversations and electronic communications

This led to the MiFID II package with MiFID II itself (focusing on retail and opt-in professional clients) and the associated regulation MiFIR (dealing with per se professional clients and eligible counterparty business).

The scope of MiFID II and MiFIR focuses on core and ancillary investment services being performed on an increased array of investment products. Both the Directive and Regulation also now apply third country regimes, with MiFIR allowing the possibility of jurisdictional equivalence allowing for individual firms to register with ESMA whilst MiFID II gives EU countries the option of requiring an in-country branch enabling third country firms to do business.

Midshore Consulting can assist with MiFID II & MiFIR implementation within either an EU business or one based in a third country.