Overview
MiFID in Ireland
Since 1st of November 2007, all EU Member States have been required to give effect to the controversial
Markets in Financial Instruments Directive and its supplementary level 2 directive and regulation (MiFID for short) in their national
legislation. The primary legislation in Ireland giving effect to MiFID is the European Communities ( Markets in Financial Instruments ) Regulations ( SI 60 of 2007).
The scope of MiFID is wider than the Investment Services Directive (ISD) which it replaces. In general
terms, it harmonises the authorisation requirements and on ongoing supervisory/regulatory requirements for companies, providing investment services (including
providing investment advice) or performing investment activities, providing investment advice, operating a regulated market (RM) such as
a stock exchange or operating a multilateral trading facility (MTF).
Investment firms subject to MiFID regulation are also subject to a revised, Capital Adequacy Directive (“CRD”).
Likewise credit institutions subject to MiFID regulation must also comply with a similar directive that applies to credit institutions. The level
of capital (both initial and ongoing capital cover) an investment firm subject to MiFID requires, is determined by the type of investment services
and activities it provides or performs, its scope of permission and any limitations or requirements attaching to that permission.
Who is affected by MiFID?
Broadly speaking the types of firms likely to fall within the scope of MiFID are (i) retail banks (ii),
investment banks, (iii) financial advisers unless they come within an available exemption;(iv) portfolio managers, (v)
stockbrokers and broker dealers (vi) many futures and options firms, (vii) corporate finance firms (viii) wholesale
market brokers (ix) operators of regulated markets ("RMs") and operators of MTFs (x) providers of custody services
and (xi) some commodities and venture capital firms.
MiFID compliance is the responsibility of senior management
MiFID requires that senior management are responsible for their firm's compliance with MiFID and must receive
on a frequent basis, and at least annually, written reports on Compliance, Risk Management and Internal audit, indicating in particular
whether the appropriate remedial measures have been taken in the event of any deficiencies.
Companies affected by MiFID
— Where we advise
- Applications for authorisation, including drafting compliance manual
- Compliance including, whether your service, activity or provision of advice is regulated by MiFID or whether you can avail of a MiFID exemption
- Compliance including whether a particular financial instrument is within MiFID and whether it is a complex or non complex financial instrument
- Compliance with organisational systems and controls, including safeguarding of client assets and client monies, records keeping requirements, business continuity, outsourcing, conflicts of interest, investment research and inducements
- Conduct of Business regulation, including client categorisation rules, the regulation of systematic internalisers, know your client requirements, investment advice and discretionary portfolio management, execution of complex and non complex financial instruments (and the differing regulatory treatment), best execution, client order handling and limit order regulation, tied agents, marketing (including marketing of investment products and services using the internet)
- CRD requirements that apply to investment firms
- Reporting requirements, including pre and post trade transparency, reporting to clients and reporting to the regulator
- Passporting from England into Ireland — legal issues
- Securing access to RMs and MTFs and their facilities and services
- Structuring terms of business for execution only services, investment advisory services and discretionary portfolio management
- Structuring execution policy and conflicts of interest policy
- Drafting investment management agreements and custody agreements
- Website terms and conditions for investment firms
Contact Paul Foley at pf@paulfoley.co.uk
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© Paul Foley Solicitors 2009. All rights reserved.
