As mentioned in our February 2016 Client Briefing, the European Commission has extended the MiFID II application deadline by 1 year to 3 January 2018 (although the legislation to give effect to this has not yet been finalised). The extension does not affect the timeline for the adoption of the Level 2 implementing measures required by MiFID II. Under MiFID II, MiFID investment firms (Firms):
- must safeguard client financial instruments and funds;
- will be subject to detailed product governance rules where they manufacture and/or distribute financial instruments; and
- must comply with strict rules on inducements (i.e. fees, commissions or any monetary or non-monetary benefits).
Draft Delegated Directive
The Commission received Technical Advice from ESMA on 19 December 2014. Following that, on 7 April 2016, it published a draft Delegated Directive specifying rules across the three areas listed above. The draft Delegated Directive will now be considered by the EU Council and European Parliament. If neither objects, it will be published in the Official Journal.