As discussed in January, the new legislative package tackling Markets in Financial Instruments (MiFID II/ MiFIR and the delegated acts) changed the landscape with view on the Capital Markets Union. While few CMU participants are fully in line with the new regulatory prerequisites, others struggle to comply and manage the additional costs ‘running to the billions’ (see here). Nevertheless, they are met (and will continue to be) with leniency from national supervisory authorities, who seem to have understanding for the workload it represents, running into the ‘million paragraphs’. Despite the transposition deadline (3/07/2017) there are several member states that haven’t brought MiFID II into national legislation (see here).
Research costs have been unbundled, which allegedly disrupted US asset management operations in Europe (see here) and is deemed by some to be causing a shortfall in some areas of research (see here). MiFID II also brought dark pools to the surface (see here and here) as well as hidden investment charges (see here), which is expected to provide more clarity with respect to financial assets and trading.
Voices from the industry note that, as opposed to implementing MiFID I, it is more burdensome this time around, especially considering the barrage of financial reforms that followed the crisis, such as Solvency II, UCITS IV and V, AIFMD, EMIR, CRD IV, IORPs, PRIIPs … to name a few. While it is true that the compliance efforts required from the E.U. financial industry have been significant, the regulators, supervisory authorities and stakeholders have closely collaborated in order to ensure that the current legislative framework strikes the correct balance between the necessities and interests of the industry and the principle of consumer/ investor protection.