MiFID II : an analysis of the impact that local Maltese investment services providers are facing post 3rd January 2018

Abstract

This study seeks to examine the implications of the new regulations stipulated by MiFID II. This framework is applied for investment intermediaries that provide services, such as purchasing and selling of shares and bonds and the organised trading of financial instrumentals to clients. Its objective is to eventually provide more secure, fair and effective markets and to enhance transparency in the best interest of all investors. This thesis has investigated how regulations are affecting the local Maltese investment services providers and has also enquired into the changes impacting investors. For the purpose of this research a qualitative approach was used. Several documents, articles and other relevant literature sources were accessed and perused in order to acquire insights into the wide range of issues the new directive has raised. In addition, questionnaires were distributed to local Maltese investment firms to provide further information. The data was collected, analysed and coded, using a thematic analysis approach. This dissertation concluded that the change from MiFID to MiFID II was required by the industry. The new directive has prioritised investor protection and market transparency. It has also generated better reporting to the clients regarding their investments and stipulated the filing of additional reports when trading investments for clients. Additionally, the disclosure of all related costs, be they pre-trade or post-trade, has helped clients make informed decisions based on how these costs are affecting return on their investments. However, these additional requirements have added a massive financial and logistical burden on all investment services providers. Nevertheless, this study has found that this framework is in the process of reaching its goals, especially those of investor protection and market transparency. The researcher believes that this study will particularly beneficial to potential investors, and can also be useful in providing Maltese investment services providers with additional information on how MiFID II is shaping the Maltese financial industry.