Preparing for MiFID II

From January 2018 a new regime of EU financial regulation comes into force called MiFID II. In a small, dark corner of this regulation, the EUA becomes classified as a financial instrument. This means that dealing in EUAs – trading, broking or even advising on them – becomes a regulated activity.

Intermediaries like Vertis have to become investment providers, supervised by their financial authority – national bank or ministry of finance, depending on country.Over the last three years we have been steadily preparing for MiFID and have invested heavily in new IT systems and equipment, security, new policies and procedures, and in training for our sales and back-office people. We have now submitted our application to the Hungarian National Bank. Although this is just the beginning it is an important milestone in becoming an investment service provider.

Companies which buy EUAs for compliance purpose or for hedging are exempt from most of the regulation. If you are operating an installation you are probably safe from the financial inspectors!

However, MiFID will have some implications for you. First, you will need to obtain an LEI number – a unique identifier for legal entities engaged in financial markets. If you do not already have one, ask your trader for more information.

Second, companies like Vertis will be asking you for more information about your business so that we can comply with our own obligations in categorising our clients. We apologise in advance for this!

Third, we might need to change some of the terms of our framework agreement or trading agreements, and ask for your patience in this.

Finally, the new regulatory regime should make trading safer and more transparent – it is there primarily to protect the interests of you, the consumers. Meanwhile it is business as usual and we aim to make a smooth transition.

This entry was posted in News. Bookmark the permalink.

Leave a Reply