Baku. 4 October. REPORT.AZ/ Markets in Financial Instruments Directive - MiFID-2 norms prepared by the European Union (EU) for several years will come into force on January 3, 2018.
Report informs citing the Vestifinance.ru, the law stipulates serious changes in stock trades and derivative financial instruments.
The law requires maximum transparency when trading with financial assets. With the help of MiFID-2 investment banks will not be able to hide the "secret" trade volume along with buyers and sellers. The bank, which trades on its own account, will have to register as a "company carrying out systematic internal transactions".
The new norms will enable brokers to focus on centralized exchanges and thus make transactions open and accessible. For less liquid assets, the need to disclose the price will be applied.
In addition, regulatory authorities will require the disclosure of each trade transaction as an absolute requirement. The reason is the prevention of market abuse.In other words, each portfolio manager must adhere to the principle of "best price" and implement the deal for the client at the most affordable price.
MiFID-2 also wants non-European clients to have "an identification number for a legal entity", which in turn needs additional time and causing dissatisfaction by U.S. banks. They said they would abandon the European market if full confidentiality was not provided.
At the same time, according to the analytical analysis carried out by investment banks, it is also supposed to require additional payment from customers.