MIFID II STANDARDS AND CYPRUS INITIATIVE

 

 

MiFID II standards will come into force from 2018 throughout the European Union, the goal of the updated directive is maximum transparency for financial markets. CySEC surprised everyone with its desire to lead the introduction of MiFID II, as previously everyone expected him to delay the process. The Cyprus regulator has always differed in its specificity and the great desire to attract as many companies as possible to its jurisdiction, which forced it to weaken supervision. However, having achieved the result, he thereby angered the European Commission and the majority of bankers.

Its new image, CySEC decided to build by unconditional approval of all ESMA initiatives (the European Commission for Financial Markets), previously it was decided to reduce the leverage and now Cyprus announced the introduction of fixing customer transactions. If a broker previously could send a client “count stars” in case of a request to show counterparties on his transactions, now the broker will be obliged to do it.

In his circular of January 31, 2017, the regulator stressed that new requirements are introduced on the basis of MiFID II and are mandatory. CySEC noted by paragraphs which deals fall under the disclosure, etc .:

1. CySEC will collect information about the volume of transactions executed / performed by brokers on behalf of clients for each financial instrument.

2. To calculate the volume and data collection, the broker is obliged:

a) Indicate the actual leverage for each transaction.

b) Leverage and volume for CFDs, which were closed during the reporting period.

3. (Important to note, that this item is likely to be covered by additional lighting) Operations with a short period of time are not included in the data collection. *

* Note: If this is truth, then a significant proportion of operations will go past the regulator.

The new solution of the Cyprus regulator can be seen through the prism of a global change in the rules of the game for brokers, since now all the small, “adequate” jurisdictions introduce rules for disclosing clients’ transactions. The first to launch this process was experts from the CFTC (USA) and now this standard is gradually becoming the norm for Europe. True, it is worth noting that the US can become the first jurisdiction where the ban on leverage for the instruments of Retail Forex will be lifted.

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