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EMEA: gravitational pull

Jackson, Olly.  ; London (Mar 27, 2018).

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With the new Markets in Financial Instruments Directive (Mifid II) only implemented at the turn of the year, businesses are still coming to terms with its effects. Because the directive is so wide-ranging it is influencing a number of different sectors very differently. In particular, cryptocurrency regulation is gaining increased focus, with decision makers meeting in Argentina in the coming weeks to discuss regulation of the sector as part of the G20 summit talks. If the EU is not quick to implement a legislative framework, it is likely that member states will go their own way.

Mifid here, Mifid there, Mifid everywhere

France's Autorité des marchés financiers (AMF) has announced that cryptocurrency derivatives will be regulated like any conventional financial instrument, the first European country to do so. Therefore, online platforms offering these will be included under Mifid II. But the new rules could attract more retail investors into a sector European regulators are weary of, offering greater legal certainty and investor protection than otherwise. This is the risk of regulation that has been warning off European regulators: that any regulation could legitimise an investment they disapprove of. But with France deciding to go their own way and other jurisdictions potentially following suit, this is likely to force EU-wide bodies to take action soon.

In further Mifid-related news, private equity firms could be forced to apply for a Mifid passport after Brexit, in the event that a financial services agreement is not reached between the EU and the UK. Associated more with banks, the new directive affects all investment advisors. Some private equity firms are set up as an advisor and some are not, but to be certain it may be advisable for all private equity firms to get a Mifid passport if they conduct business in the EU.

Mifid is...