Investor protection will be strengthened by introducing new product governance and independent investment advisory requirements, extending existing rules to structured deposits and improving requirements in several areas, including the accountability of governing bodies, incentives, information and disclosure to customers, cross-selling, employee compensation and best execution. www.esma.europa.eu/policy-rules/mifid-ii-and-mifir MiFID II brings a number of important changes to the market infrastructure. It introduces the concept of an organised trading system (“OTF”), which covers the trading of instruments other than own funds previously exploited outside the scope of MiFID. The rules on regulated markets (“RM1”) and multilateral trading facilities (“MTF2”) have been aligned, and a number of organisational requirements currently applicable to RMs and MTFs have been extended to newly launched OTFs. In addition, the obligations of the IS3 have been strengthened. There are also new requirements for high-frequency and algorithmic trading in terms of transparency before and after trading. MiFID II harmonises the application of supervision between Member States and extends the scope of the rules. In particular, more reporting and testing requirements will be imposed to increase transparency and reduce the use of dark pools (private financial exchanges that allow investors to trade without disclosing their identity) and over-the-counter (OTC) transactions. Under the new rules, the trading volume of a stock in a dark pool is limited to 8% over 12 months. The new rules also target high-frequency trading.
The algorithms used for automated trading must be registered, tested and include circuit breakers. In June 2017, the European Securities and Markets Authority (“ESMA”) published guidance on governance requirements for MiFID II products. The guidelines set out a number of criteria to be analysed by manufacturers when assessing a target market. These include MiFID II which has led to a complete overhaul of the European market structure and investor protection framework. The scope extends to EU investment firms, their branches and EU branches of third-country firms providing MiFID II services and activities to clients for financial instruments within their scope (including shares, bonds, UCITS and derivatives). The trading venues on which these instruments are traded must also comply with the relevant requirements of MiFID II. Transaction reporting was introduced under MiFID I and concerns the reporting of trading details submitted by investment firms to supervisory authorities. It allows regulators to monitor market abuse in financial markets. Under MiFID II, transaction reporting requirements have increased significantly. The scope of reportable products has been expanded by requiring a transaction report for all products traded on European MRs, OTFs and MTFs. In addition to the increase in the number of products eligible for reporting, the number of data fields required for reporting MiFID transactions has also increased significantly. The new data fields are: MiFID II introduces important product governance requirements.
Investment firms that manufacture products, called manufacturers, must identify a target market and take appropriate measures to distribute the product. They must set up a product approval process and regularly review the target market and the performance of the investment products they offer. They must also ensure that distributors have sufficient understanding of manufacturers` products and product approval processes to sell to their own identified target market. Access to the websites is by invitation only for institutional investors. Nothing contained on the Sites is or should be construed as constituting an offer to complete any transaction or investment. The information on these websites is provided by the Hong Kong branch of Bank of America, N.A. and compiled from information prepared by bank of America Corporation`s subsidiaries and affiliates. Your consent to use this website belongs to the Hong Kong branch of Bank of America, N.A. There are also prior requirements for advertising. Investment firms are required to publish data on the quality of execution (i.e. cost, speed, etc.) free of charge at least once a year. Investment firms are required to publish annually their five main execution venues for the previous year, as well as specific data on the quality of execution of transactions on that trading venue.
The requirements of MiFID II are divided into a regulation (MiFIR) and a directive (MiFID). The main requirements contained in each of the two are described below. The first Markets in Financial Instruments Directive (MiFID I) entered into force on 1 November 2007. He introduced a number of points, including the MiFID passport, client categorisation requirements, client order processing requirements, pre- and post-trade transparency requirements, and investment firm requirements to ensure clients receive the best possible execution. The Websites may only be used for lawful purposes. Customer Conduct may be subject to local, state, national, and international laws. Customer agrees that Customer and its authorized persons will comply with this Agreement, the laws, rules, regulations, ordinances, and other similar national and international requirements of the country, state, and province in which you access and use the Sites. MiFID II and MiFIR will ensure fairer, safer and more efficient markets and allow for greater transparency for all stakeholders.
The new reporting and testing requirements will increase the amount of information available and reduce the use of dark pools and OTC transactions. The rules on high-frequency trading will impose strict organisational requirements on investment firms and trading venues, and the provisions governing non-discriminatory access to central counterparties (CCPs), trading venues and benchmarks aim to enhance competition. You agree to receive certain documents and information provided by Bank of America and its affiliates through the Sites and/or by email made available to you through the Sites. This delivery generally consists of certain content on the Sites and certain other documents relating to Bank of America and the activities of its subsidiaries. Such electronic supply and delivery will be considered by you to be a reasonable delivery in accordance with the delivery requirements set forth in the various laws and rules, if any, the Securities and Exchange Commission, the National Association of Securities Dealers and any state or other jurisdiction. You acknowledge that you have the appropriate technological equipment to use the Sites and receive emails over the Internet and understand that your use of the Internet may result in certain operating costs, such as a monthly fee for a service provider. You agree to notify Bank of America or its affiliate if you no longer wish to receive content through this delivery process and you allow a reasonable period of time to facilitate proper delivery. ec.europa.eu/info/law/markets-financial-instruments-mifid-ii-directive-2014-65-eu_en MiFID II extends the scope of MiFID requirements to other financial instruments. Stocks, commodities, debt, futures and options, exchange-traded funds and currencies all fall under its jurisdiction. If a product is available in an EU country, it falls under MiFID II – even if, for example, the retailer who wants to buy it is based outside the EU. “Bank of America” is the trading name for the loans, trading of certain financial instruments and other commercial banking activities of Bank of America Corp. These activities are conducted worldwide by bank companies of Bank of America Corporation, including Bank of America, N.A., a member of the FDIC.
Bank of America offers the following banking products in India: working capital and term loans, structured finance, export finance, global cash management, trading products, foreign exchange services and currency solutions. .
