MiFID II : increasing transparency and its impact on local investment services providers

Abstract

This dissertation seeks to analyse the amended Markets in Financial Instruments Directive, MiFID II, and its newly developed requirements imposed on Investment Services Providers. This study mainly assesses the transparency requirements under MiFID II and their effects on investor protection. The latest transparency regime shall lead to enhanced investor protection and an overall improvement in market efficiency and financial stability. In order to collect primary data, semi-structured interviews with representatives from various investment services providers, the MFSA, the OAFS and the MSE were carried out. In addition, secondary data was utilised in order to understand deeply both the first and second versions of MiFID. This data was obtained from numerous articles, papers, and reports specifically written about this particular subject. Furthermore, in the research findings and analysis section, a comprehensive investigation of the data gathered will be prepared. This will be conducted in order to determine whether the transparency requirements under MiFID II actually strengthen investor protection or if this is just a compliance cost. Additionally, the effect of these requirements on market abuse, market efficiency, and financial stability will be examined. Ultimately, the overall effect on investment services providers will be tackled and assessed. Finally, this study concludes that MiFID II has actually contributed to strengthening investor protection and that this directive is not just a compliance cost for investment services providers. The research also determined that MiFID II is achieving its objectives however, some challenges are still present. In addition, the final chapter provides several recommendations to the investment services providers and the MFSA. One main factor that needs to be improved in Malta is investor education with respect to MiFID II, its requirements and benefits.