With the MiFID II framework the EU has expanded the reach of the regulation, i.e. the guidelines are relevant for (i) financial intermediaries and distributors of financial products, (ii) the financial markets and execution venues and, this is clearly a move up the value chain, (iii) the manufacturers of financial products.
The dynamics of the MiFID II framework is encompassing three main aspects:
1. Service model
The regulation will have substantial impacts on the service model of any financial group in the EU and beyond.
The main drivers for these impacts are:
2. Product Development
The manufacturers of products who are MiFID firms (e.g. structuring firms) or Management Companies with 'extended licences' (e.g. discretionary portfolio management, investment advice and execution of trades) are subject to new distinct rules under MiFID II for these services.
These new rules are complementary to the product regulations governing the products themselves (e.g. UCITS, AIFMD).
The guidelines prescribe a set of requirements regarding:
3. Product Placement
The third pillar of MiFID II are the enhanced provisions regarding the product placement.
These provisions are focusing on shortcomings of MiFID I as well as on:
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