by Josée Weydert & Jad Nader

The new act on markets in financial instruments (the “MiFID Act”), transposing Directive 2014/65/EU on markets in financial instruments (“MiFID II”) and implementing Regulation (EU) No 600/2014 on markets in financial instruments (“MiFIR”), was voted into law on 15 May 2018 and published on 30 May 2018. The MiFID Act will enter into force on 4 June 2018. Most issues related to markets in financial instruments are covered by the first part of the MiFID Act, while the provision of investment services will continue to be governed by the Financial Sector Act of 5 April 1993 (the “LFS”), as amended by the second part of the MiFID Act.
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The European Securities and Markets Authority (ESMA) has formally adopted new measures on the provision of contracts for differences (CFDs) and binary options to retail investors. The measures have been published in the Official Journal of the European Union (OJ) today. They will start to apply from 2 July 2018 for binary options and from 1 August 2018 for CFDs and will apply as follows: (1) Binary Options (from 2 July 2018) – a prohibition on the marketing, distribution or sale of binary options to retail investors; and (2) Contracts for Differences (from 1 August 2018) – a restriction on the marketing, distribution or sale of CFDs to retail investors. This restriction consists of: leverage limits on opening positions; a margin close out rule on a per account basis; a negative balance protection on a per account basis; preventing the use of incentives by a CFD provider; and a firm specific risk warning delivered in a standardised way.
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Jean-Paul Servais, chairman of the Financial Services and Markets Authority (FSMA), has been re-elected as vice-chairman of the International Organization of Securities Commissions (IOSCO) and to chairman of the Europees Regionaal Comité.

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The Financial Conduct Authority (FCA) has announced new proposals designed to protect millions of people who use overdrafts and high-cost credit. The changes the FCA are consulting on follow an in-depth review into the high-cost credit market and are expected to reduce the costs for consumers and give them greater control over their finances. These changes are wide-ranging and some specific proposals are being consulted on from today. In addition, the FCA will gather additional evidence and carry out further analysis before any formal decisions can be made on a number of other issues.
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The Financial Conduct Authority (FCA) has published a Decision Notice, which sets out its decision to ban Darren Lee Newton from working in any regulated activity in the financial services sector. Mr Newton is disputing the FCA’s decision and has referred the matter to the Upper Tribunal at which the FCA and Mr Newton will be able to present their cases. Accordingly, this decision notice has no effect pending the determination by the Tribunal.
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Speech by Christopher Woolard, Executive Director of Strategy and Competition at the FCA, delivered at the Anti-Money Laundering TechSprint, London: “The FCA’s own financial crime survey, in which firms submitted a year’s worth of data, showed that employees at all levels raised over 920,000 internal suspicious activity reports to their money laundering reporting officers. Meanwhile, more than 1.1m prospective customers were refused services amid financial crime concerns. This isn’t just a compliance issue, it’s a human one.”

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During the Biannual high-level networking seminar on economic and financial issues, organised by Danmarks Nationalbank, Copenhagen, Ms Sabine Lautenschläger, Member of the Executive Board of the European Central Bank and Vice-Chair of the Supervisory Board of the European Central Bank gave an interesting speech. You can read it on oue website.

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Speech by Mr Agustín Carstens, General Manager of the BIS, at the Sveriges Riksbank’s 350th anniversary conference on “350 years of central banking: the past, the present and the future.” The Riksbank’s journey from public savings bank to modern central bank epitomises the central bank as an adaptive, learning and improving organisation. Often crisis spurs adaptation, as it did in 2008. The Riksbank’s evolution points to broad trends in central banking towards fiat money, public governance, centralised payments and a lender of last resort role. Mr Agustín Carstens: “I submit that these trends will persist”.
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