Regulation

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.

The Maltese Financial Services Authority (MFSA) is the single regulator of financial services in Malta. The MFSA regulates financial institutions.

As a member of EU, Malta is subject to EU regulations and in particular to MiFIDs rules implemented by the MFSA. The MiFIDs rules are focused on the protection of the investors and the strengthening of supervisory powers in order to establish a safer, sounder, more transparent and more responsible financial system.

The MFSA made public a Conduct of Business Rulebook in order to foster a more harmonised application of the MiFIDs requirements in Malta.

Through the Maltese entity, MWC Group offers its services into other EU countries through the passporting rights conferred by EU regulations. Additional details on passporting can be under the next tab.

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 January 2023, MWC Group has passporting rights to the following countries: Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Finland, France, Germany, Greece, Ireland, Italy, Luxembourg, The Netherlands, Norway, Poland, Portugal, Slovakia, Spain, Sweden, Slovenia, Romania and the UK (under Temporary Permission Regime “TPR”).

Following the UK’s Brexit transition which came to an end at 11pm on 31 December 2020 the UK extended the passporting rights of EU companies into the UK through the Temporary Permissions Regime “TPR”. This ‘temporary permission’ allows MWC to continue to service its clients based in the UK and to carry on conducting its business in the UK. MWC Group is currently going through the process of being fully regulated by the FCA in the UK.

The FCA is a financial regulatory body in the United Kingdom and regulates the financial services industry. Its role includes protecting consumers, keeping the industry stable, and promoting healthy competition between financial service providers. The FCA works alongside the Prudential Regulation Authority (PRA) and the Financial Policy Committee to set regulatory requirements for the financial sector.

All regulated firms must comply with the FCA Handbook rules.