30th June 2016

Brexit, What next for MiFID?

The Markets in Financial Instruments Directive (MIFID) was an EU regulation initiative that aimed for harmonisation of financial services regulation in Europe’s 31 member states. 

The intention was to see increased competition and more consumer protection. 

MiFID 1 in EU directive 2004/39/EC was the first step and in April 2014 MiFID 2 was approved that tidied up the original MIFID thinking and by January 2018 MiFID 2 and MiFIR (Markets in Financial Investments Regulation) will take effect.

MiFIR/MiFID II had the potential to boost transparency and increase investor protection and readying the member states for implementation was likely to be a very painful process and no allowance for any transitional stage will make the deadline even harder to meet.

And what about the massive MiFID costs already incurred and about to be incurred by the UK? So far:

• One-off compliance costs for the UK were estimated to be up to £188 million
• Ongoing costs from 2017 are estimated to be  between £79.8-£150.4 million
• The UK will/ would have bear 36% of the estimated total cost of Mifid II
• Total transition cost estimate is £194.8 million
• Average annual cost, excluding transition: £112.5 million

*Source: HM Treasury Impact Assessment 

Now we have voted to leave the EU, where does the UK go on implementation, almost two years on from when article 50 to leave will have been implemented?

Where does the EU go as the UK market is amongst the biggest of global financial players?

Time for some guidance from the FCA and HM Treasury I think? 

Especially as the Stock Exchange is about to be acquired by the ‘Germans’…..or will it now?

Panacea Comment, Regulation