The main objective of MiFID I was to harmonize the provision of investment services in the European Union, achieving two important objectives: (i) protect investors; and (ii) promote equity, transparency, efficiency and integration of European financial markets.
The serious financial crisis that Europe suffered from 2008, as well as the rapid evolution of financial markets, demonstrated the insufficiency of MiFID I, which is why its reform was proposed to adapt the regulations to the new realities in the provision of services financial and improve those aspects whose operation had not been as expected.
MiFID II is now a reality.
The new Directive, and its implementing regulations, known collectively as MiFID II, have been in force since January 3, 2018 in all Member States. However, as it is a European Directive, it requires its transposition into the legal systems of the Member States.
However, part of the MiFID II development regulations, as well as MiFIR, are directly applicable as they are Community Regulations, which are directly applicable in the Member States and are mandatory without the need for transposition into the local legal system.
In the case of Spain, the status of the transposition of the MiFID regulation is as follows:
On August 4, 2017, the Ministry of Economy, Industry and Competitiveness publishes the Draft Law XX / 2017 of the Stock Market and the Royal Decree of regulatory adaptation to the stock market law, which will partially modify Royal Decree 217/2008 , of February 15, on the legal regime of investment services companies and other entities that provide investment services and the Regulation of Law 35/2003, of November 4, on Collective Investment Institutions.
On December 1, 2017, after having passed the consultation and public hearing procedures, the Council of Ministers proceeded to approve them, pending the issuance of an opinion by the Council of State, after which they will be sent to Parliament. for your discussion and eventual approval.
Given the lack of transposition of MiFID II in time, on December 29, Royal Decree-Law 21/2017, of December 29, was published on urgent measures for the adaptation of Spanish law to the regulations of the European Union on the matter of stock market.
The urgency with which this Royal Decree-Law has been approved, which includes only part of the transposition of MiFID II, is mainly due to the fact that the “mandatory trading " of the shares listed in Europe established by MiFIR, which requires that the operations on these assets be carried out in trading venues that comply with the provisions of MiFID II. Therefore, in order for European intermediaries to continue operating on Spanish securities in Spanish trading centers, it was necessary for these markets to be adapted to MiFID II.
The Royal Decree-Law is divided into two parts: on the one hand, it regulates the rules of access, organization and operation of regulated markets; Multilateral Trading Systems (MTF); and Organized Recruitment Systems (OTF), a new figure emerging with MiFID II.
OTFs are a multilateral system for the contracting of bonds and obligations, securitisations, emission rights or derivatives, to which the norms so far only applicable to MTFs apply. The Royal Decree-Law establishes the rules of access and operation of these trading centers in compliance with the provisions of MIFID II. Additionally, some provisions are included regarding the powers of action of the National Securities Market Commission (CNMV) that affect all types of markets.
On the other hand, the sanctioning regime is developed, clarifying that the provisions common to all sanctions that regulate aspects such as the instruction or the prescription of sanctions continue to apply. The maximum limit for very serious penalties is raised following the provisions of the directive. Currently, this limit is 600.000 euros, five times the profit obtained, 5% of the own resources, or of the funds used in the activity that gave rise to the infringement, whichever is greater. It amounts to 5.000.000 euros or 10% of the total annual turnover, whichever is greater. We proceed in a similar way with serious infringements (2.500.0000 or 5% of the annual turnover, compared to 300.000 or double the profit obtained or 2% of the own resources or of the funds used in the current regime).
Finally, it should be noted that, despite the lack of transposition of part of MiFID II, the National Securities Market Commission (CNMV) published on January 2, 2018, a statement on the application of MIFID II in which it reminds entities that "Other parts of the MiFID II / MiFIR regulatory set will also be directly applicable from January 3, 2018 (which is the case, for example, of various Regulations), as well as the direct effect that Directives may have in certain cases. according to the jurisprudence of the Court of Justice of the European Union (CJEU). "
The CNMV also indicates in that statement that according to said jurisprudence, the CNMV must promote the effectiveness of the Directives within the scope of its competences, interpreting the national regulations in force in accordance with the Directive in question, making it clear that the CNMV considers it fully applicable MiFID II from January 3
As mentioned, MiFID II is already a reality that must be faced and, as time goes by, the industry will adapt better to it, always ensuring that the financial system preserves its integrity, while protecting to investors who are part of it.
Ursula Garcia. Off counsel at finReg 360