Regulators, brokers, and venues across the bloc are gearing up for the upcoming passage of MiFID II legislation, which will change the rules of the game moving forward. This includes the Cyprus Securities and Exchange Commission (CySEC), which today announced the latest changes to its regulated markets law. MiFID II will effectively displace legislative framework signed previously, regarding regulation that surrounded financial instruments.
MiFID II will come into effect on January 3, 2018 – ahead of this date, venues and brokers are gearing up for a seismic shift that has been a long time coming. However, even regulatory authorities are seeing changes, with MiFID II replacing the Investment Services and Activities and Regulated Markets Law (L. 144(I)/2007).
In particular, the new legislative framework adopted by CySEC will consist of the Investment Services and Activities and Regulated Markets Law of 2017. Of note, this piece of regulation has transposed Directive 2014/65/EU of the European Parliament dating back to 2014, i.e. the MiFID II directive, which focused on markets in financial instruments.
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In addition, CySEC will implement MiFIR measures, including regulation no. 600/2014 on markets in financial instruments. Finally, CySEC’s new legislation includes all pertinent acts related to the MiFID II Directive as well as MiFIR regulation. This includes any and all guidelines and Q&A’s issued by the European Securities and Markets Authority (ESMA).
The announcement comes nearly two weeks ahead of the implementation, paving the way for issuing future directives in the near future. This includes any fees and charges related to the scope or passage of MiFID II or the provision of services by third country firms to eligible counterparties and professional clients that do not fall within the scope of the MiFIR Regulation.
At least in the first few months of 2018, MiFID II adoption by venues and the broader industry is certainly expected to have some hiccups, given the gravity of the new regime and its focus. Its extension to additional asset classes and measures of transparency do underscore the complex nature of its adoption. It remains to be seen how seamless the transition will be, in spite of regulatory authorities and broker venues preparing for over a year.