MiFID II & Fixed Income: Big Changes on the Horizon

The Markets in Financial Instruments Directive II (MiFID II) is a sweeping set of financial re-forms, establishing mandates for best execution and pre- and post-trade transparency.

As of early 2018, the legislation will require investment firms to give evidence of best execution to their clients and require them to publish more data about their trades and venue choices to the public and to national competent authorities. There will also be requirements to disclose costs and to collect data to justify their investment and trading decisions.

The European Securities Markets Association (ESMA) has laid out a regulatory framework that relies on transparent access to information, data analysis, time stamping, trade reporting and audit trails.

Investment firms were granted a one-year delay beyond the original January 2017 start date to allow firms to build data reporting systems and to enable the European Commission to work on technical measures.