MiFID II took effect on 3 January 2018, and has presented a significant compliance challenge for firms already within the remit of MiFID. The new directive aims to offer greater protection for investors. and provide more transparency into all asset classes. But what does this mean for your firm and what initial actions need to be considered when preparing for the changes?
Of course, the objectives remain highly relevant into retirement as more people decide to continue on an investment journey. Given that so many people have access to pension freedoms, has the definition of a ‘traditional investor’ changed? What are the risks that MiFID II is designed to overcome? Firms active in this market will need to focus on the need for full regular reviews of investment strategy, as well as changes in client circumstances. They will also need a robust process to ensure that there are no conflicts of interest in choosing a retirement vehicle.
- More pricing transparency for off-exchange markets.
- Volume caps for equity ‘dark pools’ - an alternative way fund managers use the market to execute their trades after the original MiFID.
- Splitting payments for analyst research and trading commission.
- Tougher standards for investment products.