Frances Faulds
Frances Faulds

Countdown to MiFID II. FX gears up for impending new regulation

Whether or not MiFID II/MIFIR is delayed remains to be seen, but as Frances Faulds reports, the industry is still grappling with a January 2017 deadline to get the systems in place for the biggest regulatory shake-up of the FX, derivatives and commodities markets.

First Published: e-Forex Magazine 63 / Leader / January, 2016

MiFID II/MIFIR introduces changes that will have a huge impact on the EU’s financial markets. These include transparency requirements for a broader range of asset classes; the obligation to trade derivatives on-exchange; requirements on algorithmic and high-frequency-trading and new supervisory tools for commodity derivatives. It will also strengthen protection for retail investors through limits on the use of commissions; conditions for the provision of independent investment advice; stricter organisational requirements for product design and distribution; product intervention powers; and the disclosure of costs and charges. However, on 2 October 2015, the European Securities and Markets Authority (ESMA) wrote to the European Commission advising that it would not be feasible to have some IT systems necessary to implement certain MiFID II provisions ready for 3 January 2017, which has given rise to the discussions of a delay by the European Commission and Parliament. The key technical challenges are...continued

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