The principle of investor protection under the proposed MiFID II

Abstract

In Chapter 1 I will delve into certain key provisions that deal with the principle of investor protection under the Investment Services Directive and under the original MiFID. In relation to the original MiFID, I will specifically focus on the provisions that deal with the 'client classification' rule, communications and investment advice provided by investment firms to clients, the suitability and appropriateness tests, client agreements, order handling and client reporting, the 'Best Execution' requirement, transparency, conflicts of interest and inducements. In Chapter 2 I will delve into the reasons underlying why the European legislators felt the need to amend the original MiFID and propose the MiFID II. I will also outline the main amendments that the European Commission proposed be made to the original MiFID in the proposed MiFID II. I will specifically focus on the proposed tightening of the 'Best Execution' rule, the proposed ban on inducements received by independent investment firms that provide investment advice and / or portfolio management, the proposed more stringent requirements for 'Structured UCITS,' the proposed tightening of the rules that regulate Eligible Counterparties, the proposed restrictions on cross-selling, the proposed strengthening of Corporate Governance in the Financial Sector, the proposed revised provisions relating to recording arrangements, the proposed enhanced supervisory powers granted to national regulators and to ESMA and the proposed new requirements for third country firms. In Chapter 3 I will analyse the various reactions that the major amendments that the European Commission proposed be made in the proposed MiFID II (dealt with in Chapter 2 of my thesis) provoked by the financial services industry. In Chap In Chapter 5 I will voice my thoughts on the proposed MiFID II, state whether, overall, this proposal will enhance the level of investor protection in the European Union and discuss any improvements that could be made to the proposal in order to further enhance investor protection in the European Union.