Financial Market Regulation Markets in Financial Instruments Directive (MiFID) II
The European Commission has been developing regulations to increase transparency and to harmonize regulatory disclosures across European financial markets since 2004. The first part of the Markets in Financial Instruments Directive (MiFID) was drafted and passed for implementation in 2006.
In view of the direct impacts of the global financial crisis in 2008, European member states decided to extend the current regulatory framework, resulting in the Markets in Financial Instruments Directive 2014/65/EU (“MiFID II"). Its aim is to enhance financial stability and investor protection while improving market efficiency and competition. MiFID II was approved by the European Parliament in 2014 and entered into force on January 3, 2018.
MiFID II is designed to:
- Increase investor protection
- Enhance market structures and market transparency
- Strengthen corporate governance and internal control frameworks
- Enforce specific rules governing algorithmic and high-frequency trading
MiFID II applies to all clients domiciled in a country within the European Economic Area (EEA). Clients whose domicile is outside the EEA are not directly impacted by MiFID II.
The implementation of MiFID II will generate benefits for our EEA clients, including:
- New and more detailed reports on portfolio performance as well as transparency about cost structures and compensation so that clients are well informed about how their portfolio is performing and which costs are incurred
- Standardized fact sheets for our products, including details of risks and costs, thus ensuring that clients receive comprehensive information about our offering prior to the trade
- New detailed cost overviews for each investment decision and an annual report, providing Retail and Professional Clients with information on the total cost incurred for their transactions
- The production of minutes for every advisory meeting to document the suitability of the advice given, including details of how that advice meets the clients’ preferences, objectives and other investor characteristics
- Clients will automatically be informed when the portfolio performance reaches a certain loss threshold
- A policy to ensure best execution of client orders to deliver the best possible outcome for our clients
In addition to these services, we offer Eligible Counterparties an extended product portfolio for derivatives, e.g. complex bonds, alternative investment funds or private equity products. Please contact your relationship manager for further information.
We have invested substantially in our IT systems to provide more efficient processes and extended features for clients. Examples include the increased automation of our order management systems, which makes it even easier to process client orders and increases the time available for advisory meetings.
We have enhanced our client classification rules, allowing us to tailor our product offering even more closely to the needs of our clients so that they can fully rely on our advisory services.
Private clients, usually considered as Retail clients, with a sufficient volume of financial assets and an adequate level of financial know-how can request to opt-up and be classified as a Professional Client under MiFID II rather than a Retail Client. Professional Clients have access to additional financial products and services. Please contact your relationship manager for further information.
MiFID II generally affects financial institutions that are domiciled in a member state of the EEA and advise clients within the EEA. Although Credit Suisse is not a financial institution domiciled in the EEA, MiFID II is relevant for us because we:
- Have a global presence and our clients benefit from cross-border advisory offerings
- Give our clients access to most European and international trading venues
In addition, all Credit Suisse affiliates and branches domiciled within the EEA have to ensure they are compliant with MiFID II.
The global interconnectedness of the financial markets in which Swiss banks operate requires the continuous alignment of business practices with international standards. Since Swiss banks provide a substantial portion of their financial services to clients in the EEA, it is important to ensure the banks have continued access to European markets in the future. Credit Suisse generally takes a positive view of the regulatory measures set out under MiFID II, although the implementation of those measures usually entails significant levels of investment. By complying with these requirements and investing in the business, Credit Suisse becomes more competitive and clients benefit from a broader offering of financial services.
Credit Suisse’s Regulatory Oversight and Implementation unit has implemented a platform with state-of-the-art technology to support our relationship managers and clients at every stage of the advisory process – including in the preparation of investment proposals, suitability checks, portfolio monitoring and the initiation of securities transactions. Investments have also been made in the efficiency and transparency of order processing for financial transactions. At the same time, the degree of automation of our order entry systems has been adapted and our best execution guidelines have been further enhanced.
Credit Suisse is committed to ensuring compliance with MiFID II and to investing continuously in our relationship with clients and in our systems for the processing of client orders to achieve the best possible result for our clients.
Please see below the Legal Entity Identifiers (LEI) for selected entities within the Credit Suisse Group
- Credit Suisse AG
- Credit Suisse (Switzerland) Ltd.
- Neue Aargauer Bank AG
- Credit Suisse International
- Credit Suisse Securities (Europe) Limited
- Credit Suisse Securities Sociedad de Valores Sociedad Anonima
- Credit Suisse (Deutschland) Aktiengesellschaft
LEI-Service for Credit Suisse clients that want to register for an LEI.
Credit Suisse is partnering with Swiss-based Deloitte AG to offer our clients a fast and easy registration of an LEI. Our clients will profit from a registration process at a reduced price (CHF 65 for issuance and CHF 57 for yearly renewal; all quotes exclusive VAT). If you wish to register for an LEI, please visit www.lei-portal.ch and follow the required steps. Please make sure to contact your relationship manager to obtain the discount code with which you claim the Credit Suisse exclusive rate.
Information regarding National Identifier is available here.
TTCA refers to arrangements, including repurchase agreements, under which a collateral provider transfers full ownership of financial collateral to a collateral taker for the purpose of securing or otherwise covering the performance of relevant financial obligations. In accordance with MiFID II, such arrangements may only be offered to professional clients and eligible counterparties.
Credit Suisse would like to highlight the risks associated with Title Transfer Financial Collateral Arrangements in the following information statement.
Credit Suisse has established Best Execution arrangements for retail and professional clients that describe the principles, duties, and responsibilities to take all sufficient steps to systematically obtain the best possible result when either directly executing transactions on clients' behalf or transmitting client orders to intermediaries for execution.
Credit Suisse has opted-in voluntarily to be a SI in Equity & Equity-like products, Rates products, Credit derivative products, FX derivative products, some Equity Derivative products and Bonds. Furthermore, Credit Suisse will operate a bilateral Organized Trading Facility in accordance with Swiss FMIA.
Please see the attached document for more details on SI.
- Credit Suisse SI Status (PDF)