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Markets and Securities Services |
Netherlands
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in its implementation proposal of October 2016
that the transaction reporting obligation does
not apply to fund managers.
Investment firms dealing on own account by
executing client orders outside a trading venue
— known as SIs — will be subject to enhanced
firm quote obligations. There are also new
requirements for firms engaged in algorithmic
and high-frequency trading, new obligations
for trading venues concerning circuit breakers
and rules relating to minimum tick sizes and a
ban on broker crossing networks for equities.
New position limits, position reporting and
position management powers are introduced
for commodities.
The third point to consider is that, while the
headlines may have focused on the new markets
requirements, MiFID II and MiFIR also make
many important amendments to MiFID’s conduct
of business rules, which snowball into significant
regulatory reform, including amendments to
terms of business. The new conduct of business
requirements include:
• Strict restrictions on independent advisers
and portfolio managers making or receiving
fees, commission or non-monetary benefits.
The Netherlands already has rules on
receiving or paying commission which are
more strict than under the current rules.
Therefore, it is expected that the MiFID II
restrictions will not have a big impact on
investment firms that already operate in the
Netherlands.
• Enhanced product approval process rules.
• New supervisory powers for ESMA
and Member State regulators to ban
a financial product.
• And new requirements relating to best
execution, including that an investment firm
must summarise and publish annually its top
five execution venues by trading volume for
each class of instrument and information on
the quality of execution obtained.
The fourth and last point to keep in mind is
that investment firms may be under pressure
from regulators that ask questions about
implementation plans and projects.
Who is affected by it?
Pretty much everyone involved in financial
services will be affected. MiFID II and MiFIR
will underpin the provision of investment