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With the introduction of the Markets in Financial Instruments Directive (MiFID), financial institutions are faced with many investor protection provisions; this has a major impact on the day-to-day operations of private banks, which provide investment services to predominately retail or non-professional investors. The purpose of this paper is to determine how MiFID provisions regarding investor protection with respect to suitability are complied with in practice by private banks.

Based on interviews with 25 representatives of private banks from 10 different European Union (EU) member states, the researchers have determined how these provisions are fulfilled and associated risks mitigated. Mapping out the suitability requirements of MiFID and comparing them with how these have been operationalised, we arrive at the question of whether this leads to a level playing field and investor protection by different private banks.

Although MiFID is trying to achieve a level playing field between the EU member states, this study shows that this has not been achieved in all areas. Investor protection requirements from MiFID are interpreted and operationalised differently. Although these differences are sometimes small, sometimes they are larger and affect the way the investor is served and suitability determined.

This research provides a unique insight into the way private banks in Europe have implemented the MiFID II requirements and gives insight into best practices. For the future, this research can serve as a prelude to in-depth follow-up research on the implementation of EU provisions.

This paper aims to discuss the impact of nascent Markets in Financial Instruments Directive (MiFID II) initiatives and, thus, to deliver practical insights into MiFID II implementation, compliance and cost reduction MiFID II constitutes the backbone for the upcoming financial market reforms. With the first proposal of MiFID drafted in October 2011, this regulatory framework has undergone over 2,000 amendments. As MiFID II currently stands, this Directive attempts to address issues exposed by the global financial crisis.

This study, based on secondary research and an in-depth analysis of the MiFID II framework, investigates structural and technological challenges entailed by this Directive. The analysis is broken down into the following sections: technological and structural challenges; costs of implementation; MiFID II teams; facilitating near real-time regulatory reporting; increased transparency requirements; and information technology (IT) initiatives for MiFID II compliance.

MiFID II commands significant changes in business and operating models. With this in mind, the study indicates current technological and structural challenges faced by financial institutions and advises on ways of mitigating MiFID II risks. Although it is too early to assess the costs of implementing MiFID II, this paper suggests ways of reducing MiFID II-related costs. The study also advises on organising dedicated teams to deal with MiFID II. Furthermore, this paper argues that early investments in IT systems and processes would allow financial services firms to gain a competitive advantage and, hence, scoop up market share or launch new, lucrative services – especially in the area of collateralisation and market data processing.

This paper shows that the current version of MiFID II still requires a great deal of attention from the regulators that need to readdress contentious issues revolving around the links between MiFID II and other regulatory frameworks such as European Market Infrastructure Regulation and Dodd–Frank. This study addresses the MiFID II compliance issues by adopting European Union and non-European Union banks’ and asset managers’ perspectives and, hence, delivers practical implications for risk managers and compliance officers of various financial institutions.

This paper aims to discuss key concerns surrounding the recent implementation of the Markets in Financial Instruments Directive (MIFID II). It focuses on the UK regime. The insights derived are envisaged to be helpful guides for participants and regulators in financial markets.

This paper used the legal-economics perspective. It relied on primary data from statutes and regulations and secondary data from the public domain to analyze the phenomenon. The analytical framework comprised the following sections: Introduction, MiFID I review, MiFID II scope, MiFID II key concerns and concluding remarks.

Only half of the EU Member States including the UK managed to transpose MiFID II within the 3rd January 2018 effective date. At this early stage of implementation, various teething problems were encountered. These pertained to costs and charges reporting, firm governance, product governance, transaction reporting, best execution and research. Owing to the sheer scale and complexity of MIFID II, most entities barely coped with their reporting obligations. Noting the situation, the Financial Conduct Authority assured firms taking all sufficient steps that they would be treated fairly.

The paper was not sufficiently empirical. However, the study benefited reasonably from triangulation of data and perspectives to provide good insights on the implementation effects of the complex and voluminous EU rules for governing financial markets with global implications.

Investors could gain from the enhanced transparency and best execution rules. Investment banks could gain from the emerging resilient, integrated and efficient financial markets. Regulators with better access to more and higher quality reporting could intervene more effectively when required.

This paper assembled and critically analyzed currently available research insights in these areas so as to provide useful guidance to those needing to work and comply with MiFID II rules and academics teaching financial services law.

The Markets in Financial Instruments Directive (MiFID) II directive was enforced in the EU in January 2018. While EU-member states implemented this directive in their national legislation, investment firms are still enforcing compliance. With the purpose of “investor protection”, the purpose of this study is to investigate the effectiveness of transparency, suitability, warning and information requirements. How do investment advisers view and embrace these MiFID II requirements? Are differences evident within this group of professionals?

In total, 267 Dutch investment advisors serving non-professional investors daily completed structured surveys on their opinion of the acceptance and effectiveness of the MiFID II requirements. The findings are compared with existing literature to examine similarities with other legislation.

The results demonstrated differences depending on the investment firms’ size and investment advisors’ seniority and gender. Professionals should be critical of new legislation and regulations, as it limits their autonomy. However, female investment advisors and those with up to ten years’ experience are less critical of the effectiveness of the MiFID II requirements, embracing them without discussion. Investment advisors in large investment firms believe that MiFID II contributes to investors’ interests, whereas those in small and medium-sized investment firms often do not share this opinion. For example, respondents considered cost transparency an effective requirement to achieve better investment services and protect investors’ interests.

The effectiveness and applicability of legislation are often viewed from a legal perspective, and enforcement is essential. However, this study explores legislation from the perspective of professionals under supervision.

The purpose of this paper is to assess the impact of the markets in financial instruments directive II (MiFID II) on investment services in the Baltic states.

The authors take an exploratory, qualitative approach, based on data conducted from interviews with nine investment industry professionals using the laddering technique. The pool of experts was selected using the purposeful sampling method, and experts must have had a minimum of five years investment experience in the Baltics, working familiarity with MiFID II, and a university education in the fields of finance or economics.

The strict requirements of MiFID II reduce the range of available investment products and services for customers in the Baltics. Also, the profitability of Baltic investment companies decreased due to high compliance costs and bans on inducements. The results indicate that this may lead to increased barriers to entry and mergers and acquisitions for small investment companies.

To the best of the authors’ knowledge, this is the first attempt to research the implications of MiFID II implementation in the Baltic states. The qualitative approach chosen offers a unique opportunity to highlight the critical effects of MiFID II on financial intermediates in smaller geographical markets.

The purpose of this paper is to summarize and discuss the implications of three related U.S. Securities and Exchange Commission (SEC) no-action letters dated October 26, 2017 that seek to address the provisions of MiFID II related to “inducements”.

Provides background information regarding MiFID II and summarizes each of the three SEC Staff no-action letters: the SIFMA letter, the ICI letter and the AMG letter.

The no-action letters provide market participants with increased clarity as to how certain aspects of their business activities, in particular the “bundling” or “unbundling” of payments for research and execution, can comply with potentially competing systems of regulations.

Practical guidance from experienced financial industry and investment management lawyers.

The purpose of this paper is to alert the European high-yield market to several regulatory developments relating to the adoption of markets in financial instruments directive (MiFID) II.

Reviews regulatory developments in connection with the MiFID II adoption and implementation, identifies several practical implications for the high-yield market professionals and suggests certain modifications in the banks’ internal protocols and practices that may be required as a result.

When the provisions of MiFID II are applied on January 3, 2018, they may have a dramatic impact on global financial markets, including a number of practical implications for the high-yield bond market. The burden of implementing MiFID II will be primarily on banks and brokers with minimal impact on the high-yield issuers.

Practical guidance from experienced high yield, securities and financial services lawyers.

The purpose of this paper is to answer a specific research question: How have EU and US regulators translated the idea of central clearing into law?

A meticulous legal research is carried out. First, the pre‐crisis regulatory regime for credit default swap (CDS) is reviewed, from a securities law angle as well as from a comparative Euro‐American perspective. Next, the regulatory processes leading to the adoption of the central clearing regulations are discussed. Thereafter, a material comparative analysis is made of the provisions related to central clearing in the EU and US regulatory initiatives. Finally, the paper is concluded with an evaluation of both legislations in the light of all previous analyses.

The research first shows that central clearing regulations rely on a series of presumptions, both concerning the gravity of counterparty risk threats and the necessity of central clearing. Additionally, the EU and US clearing regulations are similar with regard to the broad innovations they introduce, i.e. the mandatory central clearing of a variety of over‐the‐counter derivatives and counterparty risk management requirements for central clearing institutions and for non‐cleared swaps. However, the specific content of the provisions often differs. Furthermore, both legislations are limited to enouncing broad principles. This is also the case for the crucial provisions related to counterparty risk management. Therefore, these provisions in se do not guarantee the proper regulation of counterparty risk management practices. Consequently, much is to be expected from the implementing measures adopted by regulatory institutions.

The paper provides an overview of those provisions in the European and US regulations that specifically concern central clearing for CDS. It is one of the first papers which does this in a very well‐structured and clearly written manner. Also it is one of the first to provide a clear comparison between the provisions in the EU and the US regulations.

The purpose of this paper is to examine the effectiveness of UK investment firms’ implementation of the requirements in Commission Delegated Regulation 2017/589 (more commonly known as “Regulatory Technical Standard 6” or “RTS 6”) that govern the conduct of algorithmic trading activities.

A qualitative examination of 19 semi-structured interviews with practitioners working for, or with, UK investment firms engaged in algorithmic trading activities.

The paper finds that practitioners generally have a good understanding of the requirements in RTS 6. Some lack knowledge of algorithms, coding and algorithmic strategies but have used best efforts to implement RTS 6. However, regulatory fatigue, complacency, cost pressures, governance in international groups, overreliance on external knowledge and generous risk parameter calibration threaten to undermine these efforts.

The study’s findings are limited to the participants’ insights. Some areas of the RTS 6 regime attracted little comment from participants.

The paper proposes the introduction of mandatory algorithmic trading qualification requirements for key staff; the lessening of the requirements in RTS 6 for automated executors; and the introduction of a recognised software vendor regime to reduce duplication and improve coordination between market participants that deploy algorithmic trading systems.

To the best of the author’s knowledge, the study represents the first qualitative examination of firms’ implementation of the algorithmic trading regime in the second Markets in Financial Instruments Directive 2014/65/EU.

The purpose of this paper is to evaluate how markets in financial instruments directive (MiFID) and regulation national market system (Reg NMS) affect the competition for order flow among trading venues in, respectively, Europe and the USA.

The paper examines the differences between MiFID and Reg NMS and provides, based on market microstructure principles, insights as to their likely impact on European and the US securities markets.

Although MiFID and Reg NMS share the common objective of enhancing competition in securities markets, they adopt different provisions with respect to three issues that strongly influence the competition for order flow among trading venues. Specifically, some of the provisions set forth by the US regulation with respect to the best execution duty, the consolidation of market data and the disclosure of execution quality information appear to be more effective, compared to the European Union ones, in strengthening competition for order flow among trading venues.

Regulatory factors can only partly explain the current structure of the European and US securities markets. Technology and heterogeneity in traders' demand are other important factors that concur in shaping the European and US markets.

The degree of competition for order flow among trading venues depends on how regulations define the best execution duty, the availability of updated and consolidated pre‐trade (i.e. quotations) and post‐trade (i.e. transactions) information and the efficiency of post‐trading infrastructures.

The paper addresses issues not yet investigated and provides valuable insights for financial intermediaries, incumbent and prospective exchanges as to the competition in the securities industry, and to regulators as to the likely impact of the new regulations.