What’s changing

MiFID has been the foundation of capital markets regulation in Europe since its implementation, in 2007. However, since its beginning, not all benefits have been reached to the end investor as envisioned. MiFID II aims to reverse the shortcomings of the original MiFID regulation, as a result of lessons learnt by the financial crisis. The diagram below highlights the key objectives of MiFID II.


Market Structure
RMs, MTFs, SIs Addition if OTFs
  Dark pools/SD/MD platforms
  Derivative trading obligation

Market Transparency
Trading transparency Extends to other asset classes
  Pre trade transparency
  Post trade disclosure
  Order handling
  Conditions for waivers to be revised
  European consolidated tape
  101 management

Investor Protection
Best execution Extends to other asset classes
Client reporting Extends to other asset classes
  Complex products—could include product bans in the future
Treatment of inducements Revision of independent advice
Suitability & Appropriateness Extends to other asses classes

Internal & External Controls
Governance/controls Strengthening internal compliance function
  Systems & records
  Governance compliance controls
  Algorithmic trading provisions (HFT’s)
  Third country access
  Position limits for products
Passporting Extends to other classes and services
Transaction reporting Extends to other asset classes
  Expanded reporting requirements
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