Relevant Changes from MiFID I
The chapter highlights how MiFID II differs from MiFID I, with regard to trading venues, instruments and entities affected by the new legislation, as well as the changes to the supervisory architecture. This is done by describing the legislative path unde
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Relevant Changes from MiFID I
Abstract The chapter highlights how MiFID II differs from MiFID I, with regard to trading venues, instruments and entities affected by the new legislation, as well as the changes to the supervisory architecture. This is done by describing the legislative path undertaken and explaining the three-pillar content addressed by the Package (product governance, product intervention, rules governing the interaction between intermediaries and clients). We investigate how said EU legislation deals with specific issues, highlighting which rules are applicable to certain recipients and which are not, with a view to the issues of practical enforcement. In particular, the latter is addressed by explaining the rationale of including certain rules into the Directive rather than the Regulation, or vice versa. Moreover, we focus on the provisions entailing a close cooperation between different supervisory authorities. Finally, we discuss corporate governance and risk management issues, as well as those dealing with investor protection and transparency toward clients, which are highly significant in order to ensure an efficient implementation of the principles inspiring the Package.
3.1
How the Package Approaches Regulatory Issues
According to Di Noia (2017), the goals of the Package may be divided into (a) product governance, (b) product intervention, (c) rules governing the interaction between intermediaries and the clientele. The difference between product ‘governance’ and ‘intervention’ may roughly be spotted by looking at the meaning of the two words. Although they both contribute to shaping the current supervisory framework, the former is more (but not completely) in line with the ‘prudential’ approach to overseeing financial services and activities. Conversely, the latter might somehow be viewed as a step backwards, stemmed from the turbulences of the crisis: it is much closer to the old view that empowered regulators with the duty, rather than the faculty, to enact direct measures aimed at healing distortions in the market and preserving systemic stability.
© Springer Nature Switzerland AG 2019 M. Comana et al., The MiFID II Framework, https://doi.org/10.1007/978-3-030-12504-2_3
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3 Relevant Changes from MiFID I
As we read in the wording of the Directive, however, product governance has been practically interpreted in a more “interventionist” fashion than one could have expected. Di Noia (2017) noted that the provision disciplining product governance par excellence—that is, Recital 71D—designs a framework where the lifecycle of the product is regulated in its entirety. It reflects a ‘cradle-to-grave’ approach which in fact has been transferred onto the investor worth protecting, as if the Package had been introduced for “welfare” purposes in respect of a category conceived as a “weak”, endangered one. In Recital 71D, it might be read the prescription that the Member States not only ensure that investment firms act in accordance with the best interests of their clients and comply with wha
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