50 / 64
Markets and Securities Services |
Netherlands
48
Given it is a directive, Member States need
to take steps to transpose the requirements
of MiFID II into their own national laws by
3 July 2017. As a regulation, MiFIR will have a
direct effect (i.e. no implementation necessary)
as of 3 January 2018. In the Netherlands,
MiFID II will be implemented into the Act on
Financial Supervision (
Wet op het financieel
toezicht
, AFS).
The Dutch Ministry of Finance (the Dutch
Ministry) had previously consulted on the
implementation of MiFID II into the AFS
in June 2015
1
and further published its
implementation proposal in October 2016.
2
In addition, the Dutch Ministry is currently
consulting on the implementation of MiFID
II and its Level II rules into lower decrees
such as the Decree on conduct of business
rules AFS (
Besluit Gedragstoezicht financiële
ondernemingen Wft
, BGfo).
3
Below we take a look at what we consider to be
MiFID II’s key points and more specifically who
will be affected.
What are the key points?
There are four key points to consider.
The first point concerns the strategic
implications of the new EU legislation and its
impact on group corporate structures due to
changes to the exemptions set out in MiFID II
and new provisions in MiFID II and MiFIR relating
to non-EU firms wishing to do business in the
EU. The Dutch minister of finance proposes
that, in principle, non-EU firms that provide
investment services or undertake investment
activities in the Netherlands need to be licensed.
If the services are provided to non-professional
and professional clients, a branch will need to
be established in the Netherlands. Until the
EC’s equivalence determinations, there will be
an exemption and thus no licence or branch
obligation for non-EU investment firms that are
established in the US, Australia and Switzerland
and that provide their services to professional
clients in the Netherlands or undertake
investment activities such as dealing on own
account in the Netherlands.
The second point, meanwhile, concerns dealing
effectively with the new markets requirements
and changed market structure. You must
consider which markets you will continue trading,
or become a market maker, in, as, for example,
a new type of trading venue, the organised
trading facility (OTF), will be created to capture
multilateral trading in non-equity instruments
that does not currently take place in regulated
markets (RM) or multilateral trading facilities
(MTFs). There is also a new trading obligation
to trade certain listed shares on an RM, an MTF
or a systematic internaliser (SI) (see below),
as well as the introduction of a requirement to
trade certain classes of derivatives on a RM,
MTF or OTF. There will also be new trading rules
for equity and derivative instruments, new
pre- and post-trade transparency obligations
for equity-like and non-equity instruments,
extended transaction reporting requirements and
a regulatory framework for consolidated trade
data. There has been some discussion whether
the transaction reporting obligation also applied
to fund managers. The Dutch Authority for the
Financial Markets was of the opinion that it was,
but the Dutch minister of finance has confirmed
MIFID II AND ITS IMPACT ON FUND
MANAGERS IN THE NETHERLANDS
The 2008 global financial crisis forced the European Commission (EC) to re-
evaluate whether the Markets in Financial Instruments Directive (MiFID) was fit
for purpose, and it was decided that the directive’s key principles — a regulatory
framework centred on shares and regulated markets — needed to be updated
to take into account a more complex market characterised by increasingly
diverse financial instruments and methods of trading. As a consequence, as of 3
January 2018, MiFID will be replaced by a recast Markets in Financial Instruments
Directive (MiFID II) and the Markets in Financial Instruments Regulation (MiFIR).