MiFID investment protection

MiFID investment protection

MiFID investment protection

Most importantly, the MiFID imposes rules and points raging not only banks but all financial entities must comply. Let us see the characteristics and effects of the new European directive.

Introducing the MiFID

This MiFID, an acronym that stands for "Markets in Financial Instruments Directive", was created to "bind" the national laws in Europe, around certain financial issues. It contains safeguards for investors and markets, competition safeguards, parameters for proper corporate governance and the interest of consumer protection. But well see the most salient points of the MiFID.

Effects on customers of Bank

MiFID contains provisions that have a positive impact on customers of the Bank. In particular, would be collected more likely to assert their rights in respect of the Institutes, for example, does not properly inform users or determine if the situations "investments" to lose: the case of advice to the investment too risky . MiFID, in essence, wants to push banks and consultants to a customer profiling in order to organize against it, and based on proper communication tools appropriate to their investment profile. Were provided two instruments for the verification of the profile:

1. Test of adequacy, which concerns the economic resources of the customer and its ability to deal with the technical and financial consulting.

2. Review of appropriateness, which must determine how each investment is suitable for the customer profile (risks).

Financial advice

The MiFID regulates the consulting and services business of investment instruments. In particular, the standard of "best execution" obligation requires the definition of the best possible conditions that every consultant should pursue the objective to protect the customer. Furthermore, the Directive considers the same advice for real "services" to be paid solely as competent, then banks and licensed professionals. We recommend further study also the site of the Italian Stock Exchange.

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