What is MiFID II
The Markets in Financial Instruments Regulation (“MiFIR”) and the Markets in Financial Instruments Directive (“MiFID”), together “MiFID II”, entered into application on 3 January 2018.
MiFID - What is it
Since its implementation in November 2007, the Markets in Financial Instruments Directive (“MiFID I”) was the cornerstone of capital markets regulation in Europe. MiFID I targeted primarily equity markets and instruments.
MiFID I was recast by MiFID II, which extends market transparency and integrity rules to derivatives and debt financial instruments: it aims to move the trading of financial instruments as much as possible onto Trading Venues and hence to reduce bilateral OTC transactions, and to promote transparency on TVs and by Systematic Internalisers (SI).
MiFID II also reinforces investor protection rules (notably on product governance) and conduct of business rules on all financial instruments and structured deposits.
Finally, it brings additional measures on the reinforcement of control and management functions and on the enhancement of financial supervision.
MiFID II – Products and transactions in scope
It covers notably cash equity, fixed income, equity derivatives, commodity derivatives, credit derivatives, emission allowances.
Some instruments are only subject to some limited requirements: structured deposits, structured financing transactions.
The following are out of scope: FX spot, spot commodities, non-structured loans and deposits, non-structured deposits, regulated savings products, insurance products, means of payment.
Main impacts of MiFID II on your transactions with our Global Market Division in Asia