Stay Compliant With MiFID II
Our Solutions Will Help You Remain Compliant With The Latest Regulations, Including MiFID II.
Learn more todayWith the updated version of MiFID, trading transactions and information will be more transparent than ever before. MiFID II requires that all prices are clearly posted before and after trades are completed, no matter the type of trading platform on which transactions occur. This gives investors access to a whole new scope of data and information and enables them to make more educated decisions regarding their clients’ portfolios.
Additionally, the new-and-improved MiFID II will also cover more types of financial instruments (rather than just shares). This means that bonds exchanged traded funds, depository receipts, derivatives, and structured finance products will now all follow the same regulations. Sellers will be required to clearly state their prices before and after all transactions, as well as other pertinent information. The main purpose of this new requirement is to allow retail firms and their customers to find the best deals available by comparing prices and other factors from the newly available data.
MiFID II now covers structured deposits as well. Previously, structured deposits were not regulated by the European Union, despite the fact that they are quite a common investment and have several protection challenges. With the introduction of the new regulations, companies that sell and purchase structured deposits will have to comply with certain rules regarding interactions with clients and oversight by supervisory bodies, as well as a variety of other stipulations.
Another major change in MiFID II is that some firms will be banned from accepting payments or benefits (“inducements”) from third parties. Thus, if an individual (such as a consultant) or a firm provides financial advice on another individual’s behalf, they no longer will be able to keep any payment that they receive. Instead, they will be forced to transfer this payment along to the actual investor. This provision marks a major change for the European financial sector.
Lastly, MiFID II also affects retail investors. The law will substantially increase the protection of retail investors and will severely limit the types of financial instruments with which retail investors can complete transactions without being legally obligated to consult a trader or similar professional.
Our Solutions Will Help You Remain Compliant With The Latest Regulations, Including MiFID II.
Learn more todayOriginally published 02 July 2014, updated 22 May 2022
Disclaimer: This is for general information only. The information presented does not constitute legal advice. ComplyAdvantage accepts no responsibility for any information contained herein and disclaims and excludes any liability in respect of the contents or for action taken based on this information.
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