CySEC

The Cyprus Securities and Exchange Commission (CySec) has just published a new document, called Practical guide to Markets in Financial Instruments Directive (‘MiFID II’) and Markets in Financial Instruments Regulation (‘MiFIR’), with the aim of providing the country's financial industry with an outline of the new European regulatory requirements. The report came out now despite recent reports that spot forex trading might be exempt from reporting until 2017.

MiFID has been in force since 2008 and is a cornerstone of the EU’s regulation of financial markets. It aims to improve the competitiveness and integration of EU financial markets by creating a single market for investment services and activities and ensuring harmonized protection for investors. MiFID is also what allows forex and binary options brokers to provide services throughout the European Union, being an internal market, on the basis of a Cyprus licence.

CySec explains to the industry in its guide that the financial crisis has exposed weaknesses in the functioning and in the transparency of financial markets. The evolution of financial markets has exposed the need to strengthen the framework for the regulation of markets in financial instruments, including over-the-counter (OTC), in order to reinforce confidence, address unregulated areas and ensure that supervisors are granted adequate powers to fulfill their tasks.

Therefore, on 12 June 2014, the European Parliament and the Council adopted MiFID II and MiFIR. This new legislative package seeks to make financial markets more efficient, resilient and transparent as well as address commitments made by the G20 on these topics. Both MiFID II and MiFIR entered into force on 3 July 2014.

Highlights

In its publication, CySec highlighted 11 main changes introduced with MiFID II and MiFIR. The seemingly most relevant to the forex industry are (excluding reporting):

CySEC

The Cyprus Securities and Exchange Commission (CySec) has just published a new document, called Practical guide to Markets in Financial Instruments Directive (‘MiFID II’) and Markets in Financial Instruments Regulation (‘MiFIR’), with the aim of providing the country's financial industry with an outline of the new European regulatory requirements. The report came out now despite recent reports that spot forex trading might be exempt from reporting until 2017.

MiFID has been in force since 2008 and is a cornerstone of the EU’s regulation of financial markets. It aims to improve the competitiveness and integration of EU financial markets by creating a single market for investment services and activities and ensuring harmonized protection for investors. MiFID is also what allows forex and binary options brokers to provide services throughout the European Union, being an internal market, on the basis of a Cyprus licence.

CySec explains to the industry in its guide that the financial crisis has exposed weaknesses in the functioning and in the transparency of financial markets. The evolution of financial markets has exposed the need to strengthen the framework for the regulation of markets in financial instruments, including over-the-counter (OTC), in order to reinforce confidence, address unregulated areas and ensure that supervisors are granted adequate powers to fulfill their tasks.

Therefore, on 12 June 2014, the European Parliament and the Council adopted MiFID II and MiFIR. This new legislative package seeks to make financial markets more efficient, resilient and transparent as well as address commitments made by the G20 on these topics. Both MiFID II and MiFIR entered into force on 3 July 2014.

Highlights

In its publication, CySec highlighted 11 main changes introduced with MiFID II and MiFIR. The seemingly most relevant to the forex industry are (excluding reporting):