Since 2007, the aim of the EU's Markets in Financial Instruments Directive (MiFID) has been to establish a regulatory framework for the provision of investment services and the operation of regulated markets by banks and other market participants within the EU.
The MiFID II regime, which came into force on January 3, 2018, has revised and complemented the rules previously in place, in particular by extending the scope of regulated products and activities.
MiFID II aims to establish a safer, sounder, more transparent and more responsible financial system by:
Extending market transparency
Strengthening investor protection
Providing partially harmonised rules for third-country firms to access the EU market
Ensuring harmonisation of administrative sanctions and effective cooperation between authorities
Improving competition in the trading and clearing of financial instruments
Since MiFID-regulated firms service the entire fund industry value chain, MiFID II has an impact on investment funds, management companies and AIFMs.
Product approval process
Target market identification and assessment
Rules on conflicts of interests
Inducements and payment for research
Ban or increased restrictions regarding the receipt and retention of fees, commission, and monetary and non-monetary benefits
Handling of unbundled research payments
Full transparency on all costs, including transaction expenses, relating to products and services
Extension of retail information requirements to professionals
Standardisation and exchange of data from manufacturers and distributors
Complex and non-complex products
Extension of the scope of complex products
Increase in range of products that cannot be sold on execution-only basis
Other key features and requirements of the MiFID II regime may directly or indirectly affect the investment fund industry, for example in terms of investor protection, transparency and reporting.
Arendt provides training sessions on request in areas including:
Analysis of the impact of the regime on a particular structure:
Impact assessment of key provisions of MiFID II and gap analysis
Distribution network mapping and inducement impact analysis
Support in identification and definition of target market
Drafting or review of documentation:
Drafting or review of appropriate disclosures in prospectuses
Drafting or review of distribution and investment management agreements
Review of marketing materials
Procedures and implementation:
Creation of checklists for client information compliance
Support services regarding fund data creation and sharing
Drafting or review of procedures
Design and implementation of MiFID II-compliant target distribution models
Uniquely in Luxembourg, Arendt's approach combines legal advice, regulatory and compliance services to meet the growing need of our clients for comprehensive support provided in the most efficient manner.
Please click on the document below to download our MiFID II factsheet.