MiFID II Compliance with CSS
MiFID II will have multiple impact areas for both product manufacturers and distributors, affecting governance, controls, operations, technology, infrastructure and client/partner relationships. For the investment industry and its distribution network it can be divided into two key parts:
The regulations usher in a new era of market and infrastructure transparency, and with it a more consistent application of reform across Europe, along with an extension of scope from the original MiFID equity coverage to include non‐equity markets such as fixed income and OTC derivatives.
New pre- and post‐trade reporting, along with T+1 transaction reporting, will become mandatory and will lead to new publication entities emerging as authorised APAs (Approved Publication Arrangements) to support near real‐time, post‐trade reporting. T+1 transaction reporting will operate either directly through the local National Competent Authority (NCA) or via an authorised Approved Reporting Mechanism (ARM).
MiFID II aims to remove conflicts of interest that arise through commission payments and inducements, with greater transparency on the use of client money.