Brexit: So what happens with MiFID II?

MiFID II: Brexit, Pain Points and Other Hurdles

From Finextra -

"The UK’s Brexit vote to leave the European Union sent a shock through financial markets, but will it throw Britain’s compliance with MiFID II into a tailspin? From a legal standpoint, Britain is still under the jurisdiction of existing European laws for at least the next two years. Prior to the vote, pundits said that buy- and sell-side firms would be subject to MIFID II’s rules since the implementation date is January 2018."

So what happens now?

Read Ivy Schmerken's Blog Post HERE>>

Pressure builds to delay MiFID II reforms

From Finextra –

“Pressure is mounting on the European Commission to postpone the implementation of securities market reforms under MiFID II by a year, as banks and brokers struggle to adapt their IT systems to meet the 2017 timetable.”

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MiFID II - How it will affect you

By Stanley Epstein

The original Markets in Financial Instruments Directive (MiFID) came into force in November 2007. MiFID brought competition to the trading procedures in the European Union. Under MiFID investment firms could operate throughout the EU on the basis of the ‘authority’ of their home EU Member State. MiFID also introduces a range of investor protection measures. In short MiFID became the cornerstone of the EU’s regulation of financial markets.

During 2011 the European Commission agreed to a proposal for the revision of MiFID. The revisions are intended to take account new developments in the trading situation since 2007 including new technological developments as well as a response to the 2008 financial crisis. The revised Directive and a new Regulation, are together commonly referred to as ‘MiFID II’.

The European Parliament approved MiFID II in April 2014. The new measures will take effect from January 2017.

The changes that MiFID II will bring are substantial and are divided into eight categories. These are listed and summarized below.

1. Commodity Derivatives – while some elements of the existing directive have been adopted a new system of position limits and position reporting is to be introduced. The existing exemptions for commercial firms who trade commodity derivatives is being narrowed.
2. Transparency – the current pre- and post-trade transparency system only applies to shares traded on regulated markets. This will change and will be applied to non-equities as well (depositary receipts, ETFs, certificates and other similar financial instruments traded on a RM (regulated market) or MTF (multilateral trading facility)).
3. High frequency trading – specific provisions are being introduced that have been designed to ensure that high frequency trading (HFT) does not have a contrary effect on market quality or integrity.
4. Market structure - revisions to market structure have been designed to create comprehensive regulation of secondary trading that is fair, efficient and safe. Firms currently operating either multilateral trading systems (MTFs) or bilateral trading systems will need to consider how they fit into the new trading landscape.
5. Organisational requirements – there will be expanded requirements in respect of the management of firms, unambiguous organisational and conduct requirements relating to product governance arrangements and a prohibition on title transfer collateral agreements involving retail clients. All investment firms are going to be affected by the provisions relating to management bodies and will need to consider how their existing governance arrangements match up to the new requirements. Product governance and remuneration requirements will affect most investment firms.
6. Trade reporting – new requirements have been designed to resolve problems with the quality and availability of data that have been observed since the original directive was introduced. This will affect firms who currently offer consolidated data services.
7. Conduct of business rules - The revised legislation seeks to boost the levels of protection granted to different categories of clients will be enhanced by the new regulations.
8. Transaction reporting - The scope of the obligations for transaction reporting is being extended, while those of reports is being enhanced and an EU-wide system of Approved Reporting Mechanisms (ARMs) is to be introduced.

International Securities Settlement & Custodial Training

2/3 July 2015 – London

Course Description

This 2 day training program is designed to provide delegates with practical knowledge about the key concepts, systems, processes and procedures in international securities settlement and custodial services as well as operational risks involved.

You will have a chance to gain skills necessary to facilitate day-to-day transactions and communication processes between all parties involved as well as all stages about clearing and settlement process, the role of exchanges and clearing houses, functioning of the settlements department, role of payments in the settlements.

Day two focuses on the role and functioning of global custody, services provided, derivatives settlements, corporate actions and risk management. You will also learn about the latest sector's trends and changes.

You will also learn about the impact of the MiFID and Target 2 Securities initiatives on the market.

The course is conducted by senior experts with many years of international experience and includes many international case studies and exercises.

What You Will Learn

By attending this program you will gain:

• Practical understanding of international securities settlement processes and custodial services, key players and concepts and relationships between them
• A clear understanding of the operational risks involved in these two services
• An update on recent developments of international securities settlement and custodial services including Target 2 Settlements and MiFID
• An understanding and appreciation of the communication processes between all the parties involved in a given transaction

REGISTER NOW

MiFID II requirements “naïve” and “terrifying” says industry

From Banking Technology –

“The financial services industry faces a daunting task as the European Commission’s MiFID II legislation draws close to its final deadline, and grave concerns about inconsistencies in the rules and the pressures of meeting it remain.

Speaking at the FIX Trading Community conference this week, Stephen McGoldrick, regulation co-chair at the FIX Trading Community and director at Deutsche Bank, said: “It’s quite terrifying when you look at all there is to be done. “The mass of work brokers are facing is huge. As for the buy-side, In MiFID one there were big areas where they could say, ‘It’s OK, the sell-side will take care of that for us’. That luxury is not going to be available to them this time.”
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