The impact of MiFID II and MiFIR on regulated markets in Malta

Abstract

Objectives: This study seeks to analyse the MiFID II framework and investigate its impacts on regulated markets in Malta. It evaluates the current requirements under MiFID I applicable to RMs in parallel to those applicable under MiFID II. The new rules under this regulatory framework shall bring about harmonisation to various aspects including transparency, liquidity, investor protection and the market structure framework. Design: Semi-structured interviews with representatives from the MSE and the MFSA were conducted. Furthermore, throughout this analysis data regarding the MiFID II framework and RMs in Malta was obtained from secondary sources. Findings: It was noted that MiFID II emphasizes the importance of transparency in order to protect both the investors and the market, while MiFID I was more focused on promoting competitive financial markets. Whist ongoing consultations are still being conducted between the NCA and the Maltese RM, certain areas still call for further discussions. Conclusions: Although MiFID II brings about new and updated requirements, it is arguable that particular areas of the framework still require further clarifications. Notwithstanding this argument, this framework shall ultimately enhance transparency and develop our markets. The revision of MiFID should aim at solving any market divergences and ensure that the benefits are spread out across all users. This study can contribute by shedding light on the importance of the role of the regulated markets in Malta.