Manentia Wealth Consulting Group Limited (Reg. No. C 80087) is authorised and regulated by the Malta Financial Services Authority under the Investment Services Act (Cap. 370) to provide investment services and enrolled under the Insurance Distribution Act (Chapter 487) to act as an insurance brokers.
MiFID II
- Brief description of MiFID II
- Objectives and Requirements
Malta Financial Services Authority (MFSA)
- Brief description of MFSA
- Powers given to MFSA by MiFID II
- Passporting
MiFID II
MiFID II is a regulatory framework enacted by the European Union which aims to bolster the European single market for investment services by harmonising standards and legislative requirements.
In this regard, the following are a few of the key objectives that MiFID II seeks to address:
1. Tighter Controls on the Financial Products that Reach You
MiFID II requires firms to determine that the financial products offered are client-specific, meaning that all relevant risks are assessed and understood before a product is distributed to you. This idea also applies when amendments to an existing financial product are made, hence making sure that the investor for whom it is meant for is taken into consideration, and that any risks associated with the product are adequate for those types of investor. In simpler terms, this framework should give you the ability to choose from a range of financial products which work in your interest and meet your investment requirements.
2. Improving Financial Markets Transparency on Costs and Charges
MiFID II improves transparency by requesting firms to disclose all the costs and charges incurred which relate to both the investment itself as well as any potential advisory costs. The rationale behind this is to provide you with a comprehensive and detailed breakdown on the costs that come part and parcel with financial products. This increased transparency should help you to better understand the nature and logic behind both a firm’s and a product’s charges, while also helping you to determine how much a firm charges relative to your investment returns.
3. Limitations on Third-Party Payments to Firms that Provide Investment Services
MiFID II limits the types of payments a firm can receive or pay when they provide investment services to you. In some circumstances, MiFID II imposes a complete ban on some firms receiving a payment or some other form of non-monetary benefits from third-parties. What this means for you is more confidence that the investment services provided are in fact acting with your best interest in mind, rather than for some other ulterior motive.
Every client that falls under MiFID II regulation, regardless of the client’s current or future residency will have peace of mind that their investments are well-secured under a comprehensive and robust EU wide regulatory framework.
MiFID II and the MFSA
The Malta Financial Services Authority (MFSA) is the single regulator of financial services in Malta. Its main functions include the protection of consumers, integrity of financial markets, financial stability, regulation of virtual financial assets and the supervision of all financial services activities.
The MFSA’s structure is based on international best practices and it continuously works on achieving a balance between strict compliance and a non-standardized approach towards financial services operators. This flexible framework enacted by the MFSA helped in establishing Malta as a widely recognized and highly developed financial services hub.
MiFID II provides important powers to respective local financial regulators, such as the MFSA, with the aim of fairer, safer and more efficient markets along with greater transparency for all market participants. In order to stay in line with MiFID II, the MFSA has updated the Investment Service Rules and also made public a Conduct of Business Rulebook. This Rulebook was published by the MFSA “in order to foster a more harmonized application of the MiFID II requirements in Malta”, thus ensuring investor protection through a regulatory framework of the highest level.
MFSA Conduct of Business Rulebook
Passporting
A direct result of the efforts made by the EU to promote and bolster the European single market is the introduction of a process known as ‘passporting’. Passporting allows for financial institutions registered in the European Economic Area (EEA) to provide services in other European jurisdictions without incurring additional regulatory burdens. Passporting rights can lead to increased efficiency in internal operations and client servicing as well as cost savings.
Passporting draws from the fundamental freedoms enshrined in primary EU law: the freedom of establishment and the freedom of services. Through the Maltese office, MWC Group is able to use passporting rights in order to enter the European Markets in an efficient manner, eliminating the process of having to obtain authorization from each country. When combined with our network of renown partners, we are able to provide financial advice in whichever EU jurisdiction our esteemed clients wish to target.
As of October 2020, MWC Group can apply passporting rights to the following countries: France, Germany, The Netherlands, Poland, Spain, Sweden, and the UK. The list of countries we are able to passport to is expected to expand in the following years.
