Background -

The Markets in Financial Instruments Directive (“MiFID II”) and the related Regulation (“MiFIR”) is the next big rewrite of EU legislation, due to take effect at the beginning of 2017. Although its greatest impact will be on sell-side broker-dealers and markets there will also be significant changes for asset managers, ranging from internal organisation and conduct of business to marketing and disclosure. This update outlines the relevant provisions and what issues asset managers should now be considering.

MiFID II is a major re-write of the original MiFID I legislation which originally came into force in November 2007. It is also considerably more detailed and prescriptive than the original regime.

The new Level 1 provisions of MiFID II were published in June 2014. Lengthy Level 2 provisions, in the form of technical standards and delegated acts, have been under consultation since 2014 and are due to be published in July-September 2015. They must be transposed into national law by member states by summer 2016 and the new structure will come fully into force on 3 January 2017. There is no transitional period.

Applicability to asset managers –

Asset managers authorised in the EU to provide investment advice and portfolio management for AIFs and/or UCITS within the definition of a MiFID investment firm will be directly subject to all aspects of MiFID II in relation to these activities.