The publication of the Markets in Financial Instruments Directive II also initiates a 30 month countdown until its total implementation, meaning all EU firms must reach compliance by January 2017.
It comes after more than two and a half years consultation and negotiation for the directive, which is also aimed at strengthening investor protection.
PwC’s financial services risk and regulatory partner, Crispian Lord, said firms should not delay their implementation of MiFID II just because of the extensive grace period until its full implementation.
“Some firms are already considering the impact of the new rules on their business model and have begun initial gap analysis as a prelude to developing their full implementation strategy,” he said. “Regulators expect MiFID firms to be aware of the impending changes.
“With advanced warning of a single go-live date, they are less likely to show firms the same degree of forbearance towards implementation challenges that we have seen with other recent regulatory changes.”
MiFID II, a revision to the original MiFID, will also limit the receipt of commissions and enforce a clear distinction between independent and non-independent advice.
It introduces a risk identification requirement in the manufacturing and distribution of financial products, and will grant regulators the power to prohibit or restrict the marketing and distribution of certain financial instruments.
Consultation
Last month, the European Securities and Markets Authority began a consultation process to look at how best to implement MiFID II, marking the directive’s first step into implementable rules and regulations.
Daniel Godfrey, chief executive of UK-based Investment Management Association said any conflict raised by ESMA’s consultation could be dealt with through commission sharing arrangements.
“If ESMA is seeking to improve governance on the payment of research, then the focus needs to be on getting suppliers of research to unbundle the costs so that asset managers can place a value on the research being supplied and to what they are paying.”
