MiFiD 2: what to expect in Switzerland?

The European Commission and the European Parliament agreed on the updated Markets in Financial Instruments Directive (MiFID 2) and on the Markets in Financial Instruments Regulation (MiFIR) on 15 April 2014.

The directive and regulation are not directly applicable to non-EU countries. However, MiFID 2 has introduced a specific regime for non-EU investment firms that provide cross-border services to clients in the EU. The directive is likely to have significant consequences in Switzerland, in particular among Swiss banks, securities dealers, independent asset managers and other Swiss financial intermediaries.

What impact will MiFID 2 and MiFIR have on Switzerland? First, Switzerland will have to amend its current legislation in order to ensure that Swiss financial institutions, including asset managers, will have unfettered access to the EU market. In particular, in order to provide services to EU clients — and in contrast to the present partial supervision as mainly concerns anti-money laundering — independent asset managers in Switzerland would be required to be subject to global supervision. Overall, Swiss regulations will have to guarantee that the level of protection for investors is equivalent to the EU provisions, and the Swiss regulatory and supervisory framework will need to comply with EU standards. Failure to comply with these requirements will result in a refusal by the European Securities and Markets Authority (ESMA) to issue its so-called ‘equivalence decision’ to enable Swiss financial institutions to be registered with ESMA and provide services to EU-based eligible counterparties and per se professional clients…

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