FRANCE: AMF Publish MiFID II Guide for Asset Management Companies

Monday April 3 2017

The Autorité des Marchés Financiers (AMF) has published a MiFID guide for asset management companies.

The guide aims to help asset management companies implement the new measures introduced by MiFID II. It will be updated to take account of the additional texts of the directive. The AMF has covered all the key topics of the directive for asset management companies, including product governance, independent investment advice, fees or best execution.

The aim of MiFID II and MiFIR is to revise MiFID I. With regard to so‐called Level 1 measures, the recently amended MiFID II requires transposition into national law by 3 July 2017 and entry into application of most its measures from 3 January 2018. In France, MiFID II is being transposed into the legislative part of the Monetary and Financial Code and has been divided into two stages:

• the first stage was completed by publication of Ordinance No 2016‐827 of 23 June 2016 on markets in financial instruments, which transposed articles 1 to 66 of MiFID II’s 95 articles and of which most measures will come into force on 3 January 2018;
• a second stage is ongoing. Article 46 of Law No 2016‐1691 of 9 December 2016 on transparency, anti‐corruption and economic modernisation; authorises the government to issue an ordinance containing the necessary legal measures to fully transpose MiFID II, including provisions relating to the powers of competent authorities. This ordinance must therefore be published before 3 July 2017.

The recently amended MiFIR is to be applied directly (most of its measures will be applied from 3 January 2018) and as such will not be transposed into French law. It is nevertheless subject to what is known as ‘negative’ transposition (in accordance with the outline described above for the transposition of MiFID II), whereby existing French legal measures on subjects covered by MiFIR are repealed.

With regard to so‐called Level 2 measures, the European Commission has published:

• a delegated directive that must be transposed into the AMF’s General Regulation before 3 July 2017, with a view to entering into application on 3 January 2018; and
• two delegated regulations and around thirty implementing regulations to be applied directly as of 3 January 2018, and which must be subject to ‘negative’ transposition, whereby any overlapping measures in the AMF’s General Regulation are repealed.

MiFID II and MiFIR contain major changes to investor protection, primarily with a view to improving disclosure and preventing conflicts of interest. They also represent a significant breakthrough in market structure and transparency. In particular, MiFID II aims to regulate investment service providers. It applies to investment firms as well as to credit institutions and UCITS or AIF management companies as part of the provision of investment and related services.

Furthermore, it allows Member States not to apply the Directive to any persons that provide only the services of investment advice and reception and transmission of orders (RTO) on behalf of third parties, provided that the activities of those persons are authorised and regulated at national level and are subjected to requirements that are analogous to those applicable to investment firms. In France, for example, this is the case for financial investment advisors and crowdfunding investment advisors.

Click on the link above for further details.