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COMPLIANCE OFFICERS’ WORKSHOP

COMPLIANCE OFFICERS’ WORKSHOP. MiFID – Firms and Markets. MiFID. Agenda Overview Areas Applicable: Passporting MTFs OTC Transaction Reporting. MiFID. Agenda Conclusion Deliverables included in your packs. MiFID. Overview Commencement – 1 st November 2007

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COMPLIANCE OFFICERS’ WORKSHOP

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  1. COMPLIANCE OFFICERS’ WORKSHOP MiFID – Firms and Markets Craigcrook Management Services

  2. MiFID • Agenda • Overview • Areas Applicable: • Passporting • MTFs • OTC • Transaction Reporting Craigcrook Management Services

  3. MiFID • Agenda • Conclusion • Deliverables included in your packs Craigcrook Management Services

  4. MiFID • Overview • Commencement – 1st November 2007 • EU/EEA wide market opportunities • The clear cost of implementation of MiFID will only prove justified if firms take the opportunities generated to raise revenues. (John Tiner) Craigcrook Management Services

  5. MiFID • Overview • Impact will vary between sectors • Costs will vary depending on markets, instruments and complexity. • Could be substantial if a Systematic Internaliser but also opportunities Craigcrook Management Services

  6. MiFID • Passporting • Arrangements similar to the ISD • Several activities upgraded to being directly passportable (see pack) • Investment Advice now directly passportable • MTFs can be passported Craigcrook Management Services

  7. MiFID • Passporting • CFDs can now be directly passported • MTFs • MTFs can provide remote access screens • Must notify the identity of its Members • And location remote user screens Craigcrook Management Services

  8. MiFID • Passporting • Establishing a Branch • Similar to current procedure • Changes to Branch information needs to be notified • Prior to the changes taking place Craigcrook Management Services

  9. Home Regulator SYSC Financial Resources Client Money Client Assets Conflicts of Interest Host Regulator Conduct of Business Transparency Transaction Reporting MiFID - Branch Craigcrook Management Services

  10. MiFID • Passporting • ISD Passports will automatically become MiFID Passports Craigcrook Management Services

  11. MiFID • Multilateral Trading Facilities (“MTF”) • Similar to current rules for ATFs • Transparent Access required • More detailed Pre Trade disclosures • BUT, Waivers for certain types of trades Craigcrook Management Services

  12. MiFID • Multilateral Trading Facilities (“MTF”) • Post trade transparency • More rigid and detailed requirements • Now similar to those for a Regulated Market Craigcrook Management Services

  13. MiFID • Over The Counter (“OTC”) • Investment firms offering OTC products defined as an SI • Systematic Internaliser definition: • Material Commercial role • Separate Staff • Available to clients on a regular basis Craigcrook Management Services

  14. MiFID • OTC • OTC for wholesale market not a SI • Advise FSA by 1st December of SI services if in Shares • Firm quotes only if for “Liquid Shares” • Otherwise Quote on demand Craigcrook Management Services

  15. MiFID • OTC • Deal at quote price for Retail • Price improvement possible for Professionals • Order value must be over €7,500 • Possibility of batching retail client orders to achieve Price Improvement Craigcrook Management Services

  16. MiFID • Transaction Reporting • SUP 17 enshrines the current arrangements • Uniform Transaction Reporting across all sectors • Transaction Reporting Users Pack being prepared by FSA Craigcrook Management Services

  17. MiFID • Transaction Reporting • MiFID Transaction Reporting requirements • Only applies to any financial instrument traded on a Regulated Exchange • Now includes Commodity Derivatives, Interest Rate Derivatives and Foreign Exchange Derivatives Craigcrook Management Services

  18. MiFID • Transaction Reporting • Making a Report • Directly by the firm or a third party acting on its behalf • By a trade matching or approved reporting system • Via a Regulated Market or MTF Craigcrook Management Services

  19. MiFID • Transaction Reporting • 23 fields to be completed • Little impact on Securities and Futures firms • More impact on Investment Managers and PIA firms • Derivatives should quote underlying Securities code Craigcrook Management Services

  20. MiFID • Transaction Reporting • Firms must identify where an MTF has been used and which one • To whom to report: Craigcrook Management Services

  21. UK FSA Other EEA States Local Regulator (not FSA as at present) MiFID Craigcrook Management Services

  22. MiFID • Non MiFID Transaction Reporting requirements • Transaction Reporting extended to: • All OTC instruments based on equity or debt instruments; and • Transactions on all “Prescribed Markets” such as AIM and OFEX Craigcrook Management Services

  23. MiFID • Transaction Reporting • Firm Capacity • Principal or Agency reported currently • Will change to: • Proprietary; Principal for Client facilitation; Agency Craigcrook Management Services

  24. MiFID • Conclusion • Work is now urgent • Impact for your firm needs to assessed • Gap Analysis • Budget the costs • Drive forward via Project Team Craigcrook Management Services

  25. MiFID William Macdonald Managing Director Craigcrook Management Services 198 Craigcrook Road, Edinburgh Tel: 0131-312-7501 Mobile:07889-534743 Email: william.macdonald@craigcrookms.co.uk Craigcrook Management Services

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