What does MiFID II mean, how to become compliant?
May 31, 2017. Stefan Willebrand.
The implementation of MiFID II is getting closer day by day and financial institutions are scrambling to stay compliant and understand what they need to do. As usual regulatory changes is creating confusion among the involved parties and we are here to help.
How does the investor protection regulations change?
An important change with MiFID II is the ban on receiving and keeping rebates from third parties in conjunction with delivering the investment services portfolio management and so called independent investment advisory. It is ok as long as the rebates are forwarded on to the customer which can be achieved today by using our apps called Position Manager and Transaction Manager in the way described by the article in our knowledge base which you can read by clicking here.
The investor protection regulations are also updated to cover so called structured deposits. The investment service “execution of orders” is changed to include the conclusion of agreements to sell financial instruments issued by the securities firm itself, that is with regards to its own issues.
The definition of financial instruments has been changed to include emissions allowances among other things.
How is the transaction reporting expanded?
TRS-reporting is expanded to include information regarding customer id and the person or algorithm at the securities firm that made the investment decision. In Bricknode Broker this will mean that we will add more properties that can be defined for an order event with the possibility to configure default information and also access these through our API.
The reporting should also include information with regards to short selling and what is called LEI-numbers for companies. LEI-number is the new type of international company numbers and is already available as a property for companies in Bricknode Broker.
Bricknode is adjusting its products so that our customers can be compliant with MiFID II, if you want to try Bricknode Broker you can sign up for a free trial by clicking here.
ESMA has developed guidelines with regards to TRS-reporting which includes the following:
More transaction types that should be reported.
- Subscriptions made in the primary market
- Gifts and heritage
- Transfers to other institutions
- Certain corporate actions
More information is to be reported
- The owner/owners of the account where the transaction happened
- Who made the decision
- Who made the decision within the firm
Declarations of goods by using KIDs
By using so called Packaged Retail and Insurance-based Investment Products (PRIIPs) numerous types of financial instruments has to be accompanied by standardized declarations called Key Information Document (KID). In Bricknode Broker we have links already to KIDs which in some cases are populated automatically by the supplier or trading route like for example MFEX.
Seminar about MiFID II with Bricknode and Gernandt & Danielsson
During September Bricknode will host a seminar with Gernandt & Danielsson in Stockholm for Bricknode customers where details regarding the changes will be relayed. The invite will be sent well in time for the seminar so keep an eye out in your inbox if you are a Bricknode customer.
Tweets by Bricknode
More Broker Blog posts
The great new feature called KycDate - February 16, 2020
Some Bricknode Broker basics - October 24, 2018
Which date concepts exists within the financial industry? - January 7, 2014