Luxembourg ManCos Get Battle-Ready For MiFID II

Luxembourg's investment management industry has a new buzzword, a new obsession, a new battlefield: MiFID II. The directive on markets in financial instruments will have a tremendous impact on the way we run our business. It will be a norm-buster. Everybody's been saying so.

But how will the norms be busted, exactly? And how will it affect the business models of Luxembourg management companies?

Please read on for the first article in a series spotlighting management companies and MiFID II, and check back soon for more. Today's topic: context and scope.

Looking back, looking ahead MiFID II is a major directive that's been in the works since 2014. It updates the original MiFID, which was implemented in 2007 and aimed inter alia to enhance and harmonise customer protection across Europe for the provision of investment services. Originally foreseen for 2017, MiFID II has been delayed and will come into force in January 2018. And, it's big: if you want to read the original texts published at the European level you would be looking at 1,876 pages... just on levels 1 and 2.

By the end of June 2017, Luxembourg will have transposed the directive into national law. Currently, it is not known if government will introduce significant changes in doing so.

ESMA has also promised further guidance and clarification, which will be welcome, since there persists an element of uncertainty about what will be required and what will become market practice. However, the time to start positioning yourselves is right now.

Slippery slope to assumptions about scope Since the start date of MiFID II is getting closer, I have been receiving more and more questions on the scope of the directive, especially for Luxembourg ManCos: is MiFID II applicable to management companies or not?

The answer is: it depends. ManCos...