Legal and Regulatory Implications for IR

What are the key areas of MiFID II?

MiFID II came into effect in 2018 and the directive has extended over five key areas: markets infrastructure and transparency, product governance, transaction reporting, rules on inducements and unbundling of research, and investor protection and best execution. 

What is the impact of MiFID II on the IR community?

MiFID II has had a significant impact on the IR function especially with regards to changes in approach to corporate access and research fees. The unbundling of research from execution services has had the most significant impact on the IR community, particularly for IR practitioners in large cap companies. Many brokers and investment banks have had to review their approach to corporate access, as they can no longer pay brokers from trading commissions for connecting them with companies. This has resulted in a shift toward fee-based models for corporate access.

What is the impact of MAR on the IR community? 

MAR, came into effect in 2016. It has introduced new rules and requirements for the disclosure of inside information, market manipulation, and the maintenance of insider lists. IR practitioners must ensure that they are familiar with these rules and have processes in place to comply with them. This includes the development and implementation of effective insider trading policies and procedures, as well as the training of relevant employees on the requirements of MAR.