MiFID II

Markets in Financial Instruments Directive is an EU legislative framework which entered into force in January 2018. It covers firms in the EU that provide services to clients linked to financial instruments such as shares, bonds, units in collective investment schemes and derivatives and the venues in which they are traded.  

The legislation seeks to improve the EU’s competitiveness by creating a single market for investment services and activities and creates harmonised protections for investors who hold financial instruments. 

MiFID addresses: conduct of business and organisational requirements, authorisation requirements for regulated markets, regulatory reporting, trade transparency and rules on admission of financial instruments to trading. 

MiFID applies to cryptoassets only in so far as the activity being classified as a financial instrument.

July 2024 European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority (ESMA) published updated Q&As on Markets in Crypto-Assets Regulation (MiCA) and MIFID II.

September 2023 European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority published its 2024 Annual Work Programme under which ESMA will ensure close market and risk monitoring and support the effective implementation of the European regulatory framework related to the digital and sustainability transitions.

July 2023 European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority (ESMA) published its first of three consultation papers under the Markets in Crypto-Assets Regulation (MiCA).

In this first consultation paper 'Technical Standards specifying certain requirements of the Markets in Crypto Assets Regulation (MiCA)', ESMA is seeking input on proposed rules for cryptoasset service providers (CASPs), in particular related to their authorisation, identification and management of conflicts of interests and also how CASPs should address complaints. Comments should be sent by 20 September 2023.  

ESMA plans to publish its second consultation paper in October 2023 and the third paper in Q1 2024.

Verena Ross, Chair of ESMA, said:

“This first consultation package is an important milestone for ESMA in the implementation of the MiCA framework. It translates our ambition to set high regulatory standards in the EU for cryptoasset-related activities into concrete requirements.

"We are determined to ensure entities involved in cryptoasset-related activities understand that the EU is not a place for forum-shopping.  We also want to remind consumers that, even with the implementation of MiCA, there will be no such thing as a safe cryptoasset.”

ESMA will consider the feedback received and expects to publish a final report and submit the draft technical standards to the European Commission for endorsement by 30 June 2024.

May 2023 European Commission

On 24 May 2023, the European Commission adopted a Retail Investment Package that "places the consumers' interests at the centre of retail investing". The aim is to "empower retail investors (i.e. “consumer” investors) to make investment decisions that are aligned with their needs and preferences, ensuring that they are treated fairly and duly protected."

One of the Commission's three key objectives of the 2020 Capital Markets Union Action Plan was to make the EU a safer place for citizens to invest in the long term. 

The package includes wide-ranging measures to:  

  • "Improve the way information is provided to retail investors about investment products and services, in ways that are more meaningful and standardised, by adapting disclosure rules to the digital age and investors' growing sustainability preferences;
  • Increase transparency and comparability of costs by requiring the use of a standard presentation and terminology on costs.
  • Ensure all retail clients receive at least annually a clear view of the investment performance of their portfolio; 
  • Address potential conflicts of interest in the distribution of investment products by banning inducements for "execution-only” sales (i.e. where no advice is provided) and ensuring that financial advice is aligned with retail investors' best interests. Stricter safeguards and transparency will also be introduced where inducements are allowed;
  • Protect retail investors from misleading marketing by ensuring that financial intermediaries are fully responsible for the use (and misuse) of their marketing communication, including where it is made via social media, or via celebrities or other third parties they remunerate or incentivise.
  • Preserve high standards of professional qualifications for financial advisors.
  • Empower consumers to make better financial decisions by encouraging Member States to implement national measures that can support citizens' financial literacy, regardless of their age, and social and educational background.
  • Reduce administrative burdens and improve the accessibility of products and services for sophisticated retail investors, by making the eligibility criteria to become a professional investor more proportionate.
  • Enhance supervisory cooperation to make it easier for national competent authorities and European Supervisory Authorities to ensure that rules are properly and effectively applied in a coherent manner across the EU and to jointly fight fraud and malpractices." 

The package is wide-ranging in scope and touches on the entire investment journey of the consumer. It consists of an amending Directive, which revises the existing rules set out in the Markets in Financial Instruments Directive (MiFID II), the Insurance Distribution Directive (IDD), the Undertaking for Collective Investment in Transferable Securities (UCITS) Directive, the Alternative Investment Fund Managers  Directive (AIFMD), and the taking-up and pursuit of the business of Insurance and Reinsurance Directive (Solvency II), as well as an amending Regulation, which revises the Packaged Retail and Insurance-based Investment Products (PRIIPs) Regulation.

The Commission also published Q&As on the Retail Investment Package and a Factsheet.

March 2023 European Securities and Markets Authority (ESMA)

ESMA published Guidelines on standard forms, formats and templates to apply for permission to operate a DLT market infrastructure.

December 2022 European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority published Q&As on MiFID II and MiFIR market structures topics.

December 2022 European Securities and Markets Authority (ESMA)

ESMA published Q&As on the implementation of Regulation (EU) 2022/858 of the European Parliament and of the Council  on a pilot regime for market infrastructures based on distributed ledger technology.

December 2022 European Securities and Markets Authority (ESMA)

The European Securities and Markets Authority published a Final Report including Guidelines on standard templates, forms and formats to apply for permission to operate a DLT market infrastructure.

The Guidelines include templates to be used by market participants to apply for specific permission to operate any type of DLT market infrastructure (DLT MI) under the DLT Pilot Regulation, namely: a DLT MTF, a DLT settlement system or a DLT trading and settlement system. They also include templates for the applicants DLT MIs to request limited exemptions from specific requirements under MiFIR, MiFID II or CSDR, provided they comply with certain conditions.

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