A far-reaching reform of the financial market in Europe will come into force on 3 January 2018. Actually, the new rules with the name MiFidII should come a year ago, due to the complexity of the introduction but postponed.
The legislature thus focuses on the inner workings of stocks, bonds, commodities and the derivatives market and monitors the goings-on of banks, investment advisers and traders. The regulator requires information about the billions of heavy transactions in the financial sector.
To meet the requirements of transparency, banks and retailers have invested several million euros. The aim is to learn from the consequences of the financial crisis from 2007 to 2009, to increase market transparency and to protect investors.
This is done by reporting all equity, bond, commodity and derivative purchases to a data pool so that the regulator can track trading activity to detect market risk.
The supervisor already complains that she has too few resources to work through the load of data and to defuse as early as possible an imminent crisis.
Although the introduction of MiFidII is now coming a year later, so far only 11 out of 28 EU countries have converted the rulebook into national law. Germany, France, Austria, Denmark and Great Britain have done their homework.
Now everyone hopes that there will be no data transfer issues from January 3rd. A government spokesman says that it is in no one's interest to exclude market participants. But all are a bit nervous.
For our clients, it was necessary to explain to supervisors that trading in agricultural derivatives was a secondary activity for them, and they therefore had a derogation. (Secondary activity exception)
As of January 3, all telephone orders will be recorded by us and stored for at least 10 years. Reporting to the data pool is handled by Saxo Bank for our clients, provided that they have an LEI number from their customers (LEI = Legal Entity Identifier). The biggest expense had the banks. Saxo-Bank in Copenhagen has been working on MiFidII since July 1, 2017.
Your team of HANSA Derivatives Trading GmbH
