MiFID 2: implications for BVI, Cayman Islands, Guernsey and Jersey firms
The Markets in Financial Instruments Directive (“MiFID”) is a European Union law that aims to harmonise the regulation of investment services across the member states of the European Economic Area and came into effect from 1 November 2007. Following the 2008 financial crisis, amendments to MiFID became the focus of tighter regulatory controls.
On 2 July 2014, a revised MiFID entered into force and consisted of a recast Directive (MiFID 2) and a new Regulation (MiFIR). Over the next two years, EU member states will transpose the new rules which will be applicable from 3 January 2017. Both these level 1 texts will be supplemented by delegated and implementing acts and technical standards which will set out the detailed rules for certain areas.
In this note, our experts detail the implications for third country firms as they currently stand.
MiFID 1: no current passport regime
Guernsey, Jersey, BVI and Cayman Island firms are treated as non-EU “third country” firms by the EU. Access to EU markets is currently not harmonised under MiFID. Each member state decides its own regulations regarding access subject to certain EU Treaty principles and provided that a third country firm should not receive more favourable treatment than an EU firm. There is no “passport” by which a third country firm can establish an authorised branch in one EU member state and then provide those services in another EU member state. Each member state may require a new authorisation.
