Technological strides and market developments since the financial crisis are now exposing weaknesses in the original MiFID. MiFID II is a complete rebuild. At over 213 pages (MiFID I was 44), MiFID II is longer, broader and more granular. It increases requirements, brings new firms into scope, and will require changes to the way some firms work.
The new framework aims to make financial markets more efficient, resilient and transparent.
- It introduces a market structure which closes loopholes and ensures that trading, wherever appropriate, takes place on regulated platforms
- It takes into account technological developments since MiFID I – introduces rules on high frequency trading and algorithmic trading
- It improves the transparency and oversight of financial markets – equity and non-equity
- It addresses the issue of excessive price volatility in commodity derivatives markets
- The new framework also increases the role and supervisory powers of regulators
- Building on the rules already in place, the revised MiFID also strengthens the protection of investors by introducing robust organisational and conduct requirements or by strengthening the role of management bodies
- A harmonised regime for granting access to EU professional markets for firms from third countries, based on an equivalence assessment of third country jurisdictions by the Commission, is introduced.
The timeline for implementing MiFID II is advancing at a rapid pace:
This is a summary timeline and its not possible to include all publications – there are many papers being published such as ESMA Q&As and level 3 guidance so you need to keep your eyes open.
The FCA has published the first policy statement (PS17/5) covering matters from consultation papers (CP15/43), including trading venues and systematic internalisers, and (CP16/19) including organisational requirements. The policy statement also covers a small number of issues from (CP16/29). and (CP16/43) and contains ‘near final’ rules which are expected to be finalised in June along with a second policy statement.
How can Bovill help?
Clients are drastically scaling up their MiFID II implementation projects as the 3 January 2018 deadline looms. And don’t forget the 3rd July deadline for authorisations and VOPs is nearly upon us. We’re currently helping a wide range of different firms through various types of implementation support projects. We can help you too – check out here to see how.