1. Context

At the end of 2009, and after the August 2008 financial crisis, the European commission initiated work to review the MIF directive adopted on 21 April 2004.CalendrierMIF2ENG

  1. Legal frame

The MIF2 is based on two texts:

  • The revised MIF1 directive (Directive 2014/65/CE), called MIFID II
    It regulates the investment companies’ activities, defines protection rules and lays down minimum requirements for penalties.
  • The EU regulation concerning markets of financial instruments (EU Regulation 600/2014), called MIFIR
    It deals with the markets organisation, the access to third party countries establishments’ access to the European market and control authorities’ powers. 
  1. Target of this revised directive

The directive’s revision:

  • Aims to improve the pre and post-negotiation transparency content,
  • Widens the financial instruments scope (derivatives, bonds, structured products,
  • Introduces a new category of the negotiation organised system
  • Strengthen the investors’ protection. 
  1. Who is concerned?

The financial instruments operating on the securities market, the commodities market and the high frequency trading market. 

  1. Main developments? 

(cf. Source : Caceis News n°41 mars 2015)

  1. What are the impacts?

This directive’s impacts go beyond the new implemented regulatory provisions.

The MIF 2 will lead the establishments to consider their company model in matters of strategy, client offer, taxation, systems, control processes and risks control. 

  1. Constraint dates

Source: www.fia.org

The MIF II regulation enters into force on 3 January 2017 after the transposition of new rules related to the development of technical and regulatory standards. Some constraints are still under development.

The calendar of implementing legislation drafting has been delayed. Some delegated acts that must specify various technical details and elements of implementing legislation must be approved by the European Commission.

The regulatory technical standards (RTS) are also pending publishing. The main ones must be published in the beginning of October and the rest at the end of the year.

The objective is to finalise the texts in June 2016 considering that the member States are bound to transpose the MIF 2 Directive before 3 July 2016. 

  1. Focus on reporting and transparency requirements

The MIF 2 implementation will require the financial establishments to reinforce their data infrastructures in order to meet the reporting requirements, mainly:

  • Stocking the necessary data for the pre and post-trade information,
  • Reporting enlargement to all instruments and collaterals,
  • Obligations concerning the reporting of transaction integrating the client identification , and the LEI of participants in the financial markets;

Enquiries and works are on-going within various stakeholders (AFTI, AMAFI, ESMA).

– Caceis News n°41 March 2015
– Ailancy : Présentation de la MIFID 2 et des principaux impacts à l’OCBF
– Revue Banque n° 786 July-August 2015
– L’info AMAFI n°121 October 2015