The objective was to increase the integration and efficiency of EU financial markets by establishing a harmonised regulatory framework for the provision of investment services in financial instruments across the EU and for the operation of regulated markets by market operators.
Following the global financial crisis, the European Commission (Commission) decided to review the MiFID framework and on 20 October 2011 published proposals for (i) a revised Directive (MiFID II) and (ii) a new Regulation (MiFIR).
On 15 April 2014, the Council of the European Union adopted the final texts of MiFID II and MiFIR (Level 1 texts).
These new texts intend to address a number of shortcomings of the initial MiFID framework as well as some sources of systemic risk which became apparent during the financial crisis.
After the proposed delay from the European Commission, the timeline for implementation should span over a period of about 3 years until January 2018. However, given the number of technical measures and guidelines expected as well as the variety of impacts anticipated on all industries segments, a swift and systematic approach for the MiFID II is deemed necessary.
The delegated acts, technical standards and guidelines to be published to achieve the objectives and goals proclaimed by the EU are substantial. Based on the initial Level 1 texts published in June 2014 and entered into force in July 2014, there will be more than 100 additional delegated acts, technical standards and guidelines expected on Level 2 and Level 3 of the implementation until June 2016.
|Directive "MiFID II"||Specific requirements regarding the provision of investment services
Scope of exemptions from the current Directive
Organisational and conduct of business requirements for investment firms
Organisational requirements for trading venues
Authorisation and ongoing obligations applicable to providers of data services
Powers available to competent authorities sanctions
Rules applicable to third-country firms operating via a branch
|Regulation "MiFIR"||Disclosure of trade transparency data to the public and transaction data to authorities
Expanded scope and stricter rules of investment firms’ transaction reporting obligations
Removing barriers to non-discriminatory access to clearing facilities
The mandatory trading of derivatives on organised venues
Specific supervisory actions on fin. instruments and positions in derivatives
Provision of services by third-country firms without a branch
|Commission Delegated acts||Expected on a range of topics to provide specifics (e.g. exemption - when an activity is provided in an incidental manner - , best execution factors, client order handling rules…).||Number of documents expected: 33 ITS|
|Commission Implementing Regulations||Expected on a range of topics to provide specifics (e.g. timing and communication on suspension and removal of FI from trading, standard forms for the exchange of information…). Adopted on the basis of ESMA implementing technical standards.||Number of documents expected: 15 ITS|
|Commission Delegated Regulations||Expected on a range of topics to provide specifics (e.g. exemptions, best execution information…). Adopted on the basis of ESMA regulatory technical standards.||Number of documents expected: 47 RTS|
|ESMA Guidelines||Expected on a range of topics to provide specifics (e.g. assessment and supervision of cross selling practices, assessment of financial instruments with a structure which makes it hard for the client to understand the risk involved…).||Number of documents expected: 10 sets of guidelines|
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