This article was written by Charlotte Day, Creative Director at Content Works
The mounting hype around MiFID II is not something to dismiss. Its been said before so it's worth saying again: this updated and wide-ranging legislative framework governing investment intermediaries and the trading of financial instruments in the European Union (EU) is formidable.
Register now to the London Summit 2017, Europe’s largest gathering of top-tier retail brokers and institutional FX investors
Non-compliant companies will get more than a slap on the wrist, so here are a few things you need to understand before you can start to adapt your business strategy accordingly.
MiFID II builds on the original MiFID regulations
MiFID II will build on the MiFID regulations introduced back in 2007. In light of the financial crisis, the new EU trading rulebook will continue to focus on transparency and investor protection while carefully monitoring trading behaviour within the markets.
All eyes will be on smooth Execution
Execution
Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018.
Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018.
Read this Term with MiFID rules affecting firms who provide services to clients linked to ‘financial instruments’ – and the venues where those instruments are traded.
MiFID II requires thorough planning and preparation
More work – just what you need. If you thought you were busy already, you’re going to need to step things up a gear. Why? Well, the upcoming MiFID II regulations are likely to affect a wide range of your firm’s functions from trading and reporting to client services and IT systems.
Already overworked Compliance
Compliance
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others.
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others.
Read this Term teams need to be up-to-date with all the latest rules and with an implementation deadline of 3 January 2018, the industry shakeup is imminent.
Your content marketing strategy will be scrutinized
As investor protection is one of the legislation’s most important goals, your content marketing strategy will certainly be scrutinized. Everything you write on your website, send out to clients, put on a banner or note in the small print needs to be compliant.
All outreach campaigns will be strictly regulated, so whether you pump out articles on a regular basis or write financial news or other informative content to captivate your target audience, you must abide by MiFID II regulations.
The dos and don'ts of content marketing under MiFID II
'There’s so much to think about, where should I even start?' I hear you. Essentially, creative and compliance teams are going to clash unless there’s some serious planning involved. To set you off on the right foot, here are some things you can do.
Specific requirements
MiFID has introduced some very specific requirements when it comes to content marketing. According to the legislation, you must:
- Provide risk warnings where necessary
- Ensure the layout and format of risk warnings give them equal prominence to the remainder of the communication
- Provide forward-looking statements based on relevant scenarios in both positive and negative market conditions
- Be fair, transparent and not misleading
- Disclose all facts and relative information
- Stick to the basics without overselling yourself
- Be prepared – implement a strict editing process or utilize writers clued up on compliance
The don’ts…
- Make guarantees you can’t keep
- Offer recommendations
- Write untrue statements
- Hide costs
- Talk about specific investment products without including disclosure statements
Why you may still get it wrong
So, you’ve read countless articles about the MiFID II updates. You feel confident about the new rules and regulations. You come to update your website or write a brief for a campaign and…bam, you seize up. Is what you’re about to say relevant and correct?
Does it abide by the rules? Should you say this? Can you say that? It really is a minefield. Too much hesitation will have a negative impact on your content marketing strategy. On the other hand, being too eager and ignoring MiFID II altogether will land you in trouble.
You may even think you’ve written something perfect only to discover you really haven’t and have to start from scratch. And as content marketing can improve your online reputation, you can’t ignore it altogether.
This article was written by Charlotte Day, Creative Director at Content Works
The mounting hype around MiFID II is not something to dismiss. Its been said before so it's worth saying again: this updated and wide-ranging legislative framework governing investment intermediaries and the trading of financial instruments in the European Union (EU) is formidable.
Register now to the London Summit 2017, Europe’s largest gathering of top-tier retail brokers and institutional FX investors
Non-compliant companies will get more than a slap on the wrist, so here are a few things you need to understand before you can start to adapt your business strategy accordingly.
MiFID II builds on the original MiFID regulations
MiFID II will build on the MiFID regulations introduced back in 2007. In light of the financial crisis, the new EU trading rulebook will continue to focus on transparency and investor protection while carefully monitoring trading behaviour within the markets.
All eyes will be on smooth Execution
Execution
Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018.
Execution is the process during which a client submits an order to the brokerage, which consequently executes it resulting in an open position in a given asset. The execution of the order occurs only when it is filled. There is typically a time delay between the placement of the order and the execution which is called latency.In the retail FX space, reliable brokers always strive to deliver best execution to their clients in order to maintain a solid business relationship with them. This is a common marketing point of emphasis by brokers, whose action execution varies considerably from company to company. When execution prices are not matching the submitted price the client is charged or credited the difference resulting from the negative or positive slippage.Slippage is a very contentious issue among retail traders, which can lead to issues. Many traders view levels of slippage at brokers as a key determinant for their business. Best Execution a Legal ObligationBrokers are required by law to diver to their clients the best execution possible. Some regulators are requiring brokers to submit execution stats in order to assess the quality of their services. Other brokers are regularly posting execution statistics in order to boost the confidence of their clients in the best execution commitment of the company.Best execution has been a point of emphasis in recent years from both retail and institutional players in the FX industry. Negotiating and executing transactions in order to promote a robust, fair, open, liquid and appropriately transparent FX market is identified as one of the six main principles outlined in the FX Global Code of Conduct, which came into effect in 2018.
Read this Term with MiFID rules affecting firms who provide services to clients linked to ‘financial instruments’ – and the venues where those instruments are traded.
MiFID II requires thorough planning and preparation
More work – just what you need. If you thought you were busy already, you’re going to need to step things up a gear. Why? Well, the upcoming MiFID II regulations are likely to affect a wide range of your firm’s functions from trading and reporting to client services and IT systems.
Already overworked Compliance
Compliance
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others.
In finance, banking, investing, and insurance compliance refers to following the rules or orders set down by the government regulatory authority, either as providing a service or processing a transaction. Compliance concerning finance would also be a state of being following established guidelines or specifications. This designation can also encompass efforts to ensure that organizations are abiding by both industry regulations and government legislation. Understanding ComplianceCompliance is a system of checks and balances that prevents fraud and inefficiencies.Additionally, this also ensures cooperation with federal financial regulations with the ultimate goal of protecting the public and provide needed information to governmental agencies to stop fraud, money laundering, and terrorist funding. Compliance in the financial industry offers stability to the markets and serves to protect customers, workers, and taxpayers from ethical threats that are inherited in individual decisions.Many organizations are also obligated to track and store compliance data. This includes all data that is relevant or belongs to a company, brokerage, etc. that can be used for the purpose of implementing or validating compliance or regulatory reporting.Given shifting regulations and the importance of compliance, the use of advanced software is increasingly being implemented to help companies manage their compliance data more efficiently. This cache includes calculations, data transfers, and audit trails.While finance is a globally unified concept, compliance is not. Regulatory compliance varies across both industries and jurisdictions. For example, the financial regulatory structures of one country may be lacking or different in another. Of note, the most tightly regulated jurisdictions in terms of compliance in the forex industry include the United States, United Kingdom or most European Union countries, Australia, New Zealand, Canada, and others.
Read this Term teams need to be up-to-date with all the latest rules and with an implementation deadline of 3 January 2018, the industry shakeup is imminent.
Your content marketing strategy will be scrutinized
As investor protection is one of the legislation’s most important goals, your content marketing strategy will certainly be scrutinized. Everything you write on your website, send out to clients, put on a banner or note in the small print needs to be compliant.
All outreach campaigns will be strictly regulated, so whether you pump out articles on a regular basis or write financial news or other informative content to captivate your target audience, you must abide by MiFID II regulations.
The dos and don'ts of content marketing under MiFID II
'There’s so much to think about, where should I even start?' I hear you. Essentially, creative and compliance teams are going to clash unless there’s some serious planning involved. To set you off on the right foot, here are some things you can do.
Specific requirements
MiFID has introduced some very specific requirements when it comes to content marketing. According to the legislation, you must:
- Provide risk warnings where necessary
- Ensure the layout and format of risk warnings give them equal prominence to the remainder of the communication
- Provide forward-looking statements based on relevant scenarios in both positive and negative market conditions
- Be fair, transparent and not misleading
- Disclose all facts and relative information
- Stick to the basics without overselling yourself
- Be prepared – implement a strict editing process or utilize writers clued up on compliance
The don’ts…
- Make guarantees you can’t keep
- Offer recommendations
- Write untrue statements
- Hide costs
- Talk about specific investment products without including disclosure statements
Why you may still get it wrong
So, you’ve read countless articles about the MiFID II updates. You feel confident about the new rules and regulations. You come to update your website or write a brief for a campaign and…bam, you seize up. Is what you’re about to say relevant and correct?
Does it abide by the rules? Should you say this? Can you say that? It really is a minefield. Too much hesitation will have a negative impact on your content marketing strategy. On the other hand, being too eager and ignoring MiFID II altogether will land you in trouble.
You may even think you’ve written something perfect only to discover you really haven’t and have to start from scratch. And as content marketing can improve your online reputation, you can’t ignore it altogether.
