The EU Parliament has indicated that the proposed MiFID II Directive and MiFID II Regulation (MiFIR) will be considered in its plenary session 19 to 22 November 2012. The MiFID II legislative proposals will replace and recast the Markets in Financial Instruments Directive (2004/39/EC) (MiFID). This will expand the scope to fixed income and derivatives markets, including commodities. It also aims to regulate or better regulate new players (dark pools, crossing networks, algorithmic traders) and to improve market transparency (pre- and post-trade), as well as increasing investor protection. Provisions deal with pre- and post-trade transparency, exchange trading of derivatives, product intervention by national authorities. Derivatives will be brought into scope as well as a new category of trading platform – the Organised Trading Facility (OTF) and entities engaged in the activity of High Frequency Trading (HFT) and provision of certain services without a branch by non-EU firms.
ESMA also published two final sets of guidelines aimed at enhancing the protection of investors in the EU. The guidelines relate to the provisions under MiFID relating to the suitability of investment advice and the compliance function. These are of interest in the investment funds context because they apply to many investment managers and also because the requirements under MiFID, AIFMD and UCITS are converging increasingly.