MiFID II: 3rd January 2018 is just around the corner

KAS BANK 

NewsFlash, 9th February 2017

On the 3rd January 2018, the Markets in Financial Instruments Directive II (MiFID II) will come into effect. The main objectives are: to increase market efficiency, deliver greater transparency and provide stronger investor protectioni. MiFID II (and other rules and regulations, e.g. EMIR and SFTR) will have a significant impact on the market and includes Investment firms. Consequently, Investment firms, including KAS BANK, are taking the necessary steps to ensure that they are compliant before the end of this year.MiFID 3th January 2018

Background
The 2008 financial crisis had a significant negative impact on the global economy. As a response, international regulators introduced a large set of new rules and regulation. All these regulations (including MiFIR, EMIR and SFTR) will profoundly change the current financial regulatory landscape.
At the beginning of July 2017 MiFID II will be transposed into national law of the EU Member States whilst the effective date of MiFID II has been postponed from the 3rd January 2017 to next year instead. The one year postponement has given all the European financial institutions much needed time to assess and determine the impact on their policies, processes, procedures and systems. Investment firms are currently adapting their IT and operational systems in order to comply with these new requirements. Despite the additional time, it still feels like a race for some market participants to meet the deadline.

Requirements of MiFID II
Most investment firms have tackled the implementation of the set of regulations by clustering the requirements of MiFID II into several main categories. Two examples of important streams are product governance and transaction reporting. There is still much debate about the interpretation and the actual implementation of the requirements. Directive 2014/65/EU has introduced product governance requirements to ensure that firms which manufacture and distribute financial instruments act in the clients’ best interests during all the stages of the life-cycle of products or services.i
The aim of the transaction reporting requirements is to inform the competent authority about all relevant circumstances under which the transaction took place. This should result in the competent authorities being better able to monitor market abuse.

How is KAS BANK working towards the deadline?
In line with other European investment firms, KAS BANK’s internal MiFID II Project team has started the year in full swing with the implementation activities required to meet the new regulations. Last year we conducted a thorough investigation of the MiFID II requirements and made an impact analysis on how MiFID II will affect our policies, processes, procedures and systems. Since then we have been working hard towards being ready for the effective date of the 3rd January 2018.

More information
For more information about MiFID II, the following links provide useful additional information

ESMA: https://www.esma.europa.eu/sites/default/files/library/2016-1436_cp_guidelines_on_product_governance.pdf
ESMA: https://www.esma.europa.eu/sites/default/files/library/2016-1452_guidelines_mifid_ii_transaction_reporting.pdf
AFM: https://www.afm.nl/nl-nl/professionals/onderwerpen/mifid-kalender