Subject
MiFID II implementation and compliance
Significance
The EU’s flagship investor protection reform -- the Markets in Financial Instruments Directive II (MiFID II) -- will come into force on January 3, 2018, Valdis Dombrovskis, the EU Commissioner responsible for financial stability, confirmed on October 17, saying that there would not be a further delay. Despite already having been given an extra year's extension, banks are struggling to comply in time because of the directive's complexity. Regulators, too, are behind in expanding their capacity to enforce it.
Impacts
Firms across the world that do any of their business within the EU will have to comply, not just those registered in the EU.
All firms trading in financial instruments must comply but those where this is a small part of their business may be caught unawares.
MiFID II will come into effect before the United Kingdom leaves the EU and is likely to be written into UK law post-Brexit.
The United States is keen to deregulate, but US firms whose EU activity is not compliant will be punished, possibly harming US-EU relations.