On January 3, 2018 the “revised Markets in Financial Instruments Directive II” (MiFID II) and “Markets in Financial Instruments Regulation” (MiFIR) came into effect. This legislation is a framework agreement for financial intermediaries which provide their clients with services related to financial instruments, as well as for organized trading in the EEA (European Economic Area). According to the ESMA, the new rules will result in a fairer, safer, more efficient market, greater transparency and enhanced protection of investors.
MiFID II / MiFIR applies to all companies in the finance industry that are domiciled in the EEA or in third countries with branches that provide services in the EEA. MiFID II is applied to all financial instruments in the EEA, commercial centers and stock market-like platforms. In comparison with MiFID I, the relevant investment universe has been expanded significantly.
The MiFID II / MiFIR requirements of the ESMA (European Securities and Markets Authority) are:
Daily MiFID II / MiFIR transaction reporting
MiFIR article 26 (1) requires that companies that perform transactions in financial instruments report all transactions carried out, with accurate details, by the following day at the latest. The report can be made directly to the responsible supervisory authority or via an upstream agency, known as an ARM (approved reporting mechanism).
The daily transaction report can be created in Allocare AMS and sent from there directly to an ARM or to the appropriate supervisory authority. This reporting is ESMA-compliant. It comes with a complete workflow (transaction detection, updating, dispatch).
Classification of the financial products based on the requirement of suitability and appropriateness
Our investment classifiers are suitable for this. These can be defined as desired.
The relevant information can be sourced from data providers such as SIX.
Our freely definable classifiers can also be used on portfolios or customers (legal entities). Division into different risk classes is a possible area of application.
Guidelines are monitored by means of constraints. A value fluctuation of more than 10% can be detected and reported.