Markets in Financial Instruments Directive (MiFID) revision is aiming to make financial markets more efficient, resilient, transparent and safer for investors. Proposed revisions consist of a Directive (MiFID) and a Regulation (MiFIR) that will provide more supervisory powers to regulators and clear operating rules for all trading activities and new trading venues to the markets.
The objective of MiFID has always been a transparent and integrated EU financial market for the protection of investors. However, the financial crisis demonstrated that the coverage of MiFID was not sufficient despite underlying principles being sound. Furthermore, technological advancements and market innovation have outpaced the regulation and altered the way markets operate. These developments called for enhanced scope of the regulation leading to arrival of MiFID II.
European Commission, Parliament and Council agreed MiFID II texts in February 2014. However, these level 1 texts will need to be supplemented by delegated and implementing acts and technical standards as required under the Directive and Regulation which will set out the detailed rules in a number of areas.
The main requirements and obligations being placed upon in-scope entities have already been agreed. However, key technical details on the precise meaning and implementation of these requirements have yet to be provided.
There are more than 75 topics for which industry is awaiting technical guidance from European Securities and Markets Authority (ESMA).
The deadline for responses to ESMA by the industry to questions in both Discussion and Consultation Papers was 1 August 2014. ESMA has now to submit its advice and technical standards to the Commission, the Commission will then publish its final Level 2 delegated and implementing regulations for MiFID II/ MiFIR.
Key to regulatory requirements