MiFID II: Definition, Regulations, Who It Affects, and Purpose.
What products are in scope for MiFID II?
In the European Union, the Markets in Financial Instruments Directive II (MiFID II) is a set of regulations that came into effect on January 3, 2018. The directive strengthens investor protection and increases transparency in financial markets. It does this by, amongst other things, introducing new rules on product intervention, position limits, and market making.
In scope for MiFID II are all financial instruments that are traded on a trading venue, or over-the-counter (OTC). This includes, but is not limited to, shares, bonds, derivatives, and structured products.
There are some exemptions from the scope of MiFID II, for example for spot FX contracts and certain OTC derivatives contracts that are entered into between eligible counterparties. Does MiFID II apply to banks? Yes, MiFID II does apply to banks. However, there are certain provisions within MiFID II that do not apply to banks, such as the requirement to trade on regulated markets. When did MiFID 2 take effect? MiFID 2 took effect on January 3, 2018.
The Markets in Financial Instruments Directive (MiFID) is a European Union law that provides harmonized regulation for investment services across the 31 member states of the European Economic Area (EEA). MiFID 2 is an update to the original MiFID directive that was passed in 2004.
The goal of MiFID 2 is to enhance investor protection and promote fairness and transparency in financial markets. The directive accomplished this by, among other things, introducing new rules around product governance, position limits, algorithmic trading, and market structure.
MiFID 2 was first proposed in the wake of the global financial crisis of 2007-2008. It took nearly a decade for the directive to be finalized and enacted.
MiFID 2 has been generally well-received by the financial industry. However, some have criticized the directive for being too complex and for creating an uneven playing field between different types of market participants. How does MiFID II affect equity Research? The Markets in Financial Instruments Directive II (MiFID II) was introduced in January 2018 as a response to the global financial crisis. The directive aims to increase transparency and reduce risk in the financial markets.
MiFID II affects equity research in a number of ways. One of the most significant changes is the introduction of a unbundling requirement, which means that firms must now charge separately for research and execution services. This has led to a decrease in the amount of research available, as firms are now less likely to produce research that is not directly linked to a transaction.
In addition, MiFID II has introduced a number of new rules and regulations regarding the production and distribution of research. For example, firms must now disclose any conflicts of interest that may exist, and all research must be approved by a designated person within the firm.
The impact of MiFID II on equity research has been mixed. While the directive has led to some reduction in the amount of research available, it has also introduced greater transparency and accountability into the process.
What is the purpose of MiFID 2? The Markets in Financial Instruments Directive (MiFID) is a European Union directive that regulates financial markets. It was first introduced in 2004, and was subsequently revised in 2007 and again in 2014. The most recent version of MiFID, MiFID II, came into effect on January 3, 2018.
MiFID II is designed to enhance investor protection and promote fairness and transparency in financial markets. It does this by, for example, introducing new rules around the sale of complex financial products, and by increasing the reporting requirements for investment firms. MiFID II also seeks to make it easier for investors to compare the fees and charges associated with different financial products.