The changes to the MIFID II text will impact a wide range of players in the industry, including financial advisers, private client wealth managers, investment managers, discretionary managers, platforms, and any other financial intermediary.
Fund managers will have to present total fund charges to clients and update these at the very least annually.
Anyone providing an investment service covered by the directive will be subject to authorisation by their national regulator in order to “protect investors and the stability of the financial system”.
According to the directive, investment firms must “inform their clients about all the other costs and associated charges related to their provision of investment services in relation to that financial instrument or structured deposit”.
Negotiations between the UK and Europe on fund transparency faced pressure to reach an agreement in time to finalise the text ahead of the European Parliamentary elections in May.
The European Securities and Markets Authority (ESMA) will consult on further detailed rules throughout 2014. Firms should begin to consider their implementation plans in anticipation of being fully compliant by the end of 2016.
