Protection of investors
Investor protection is an important part of MiFID II. Enhanced conduct of business obligations are strengthening investor protection.
Investment firms should provide more information on the cost of an investment service and the independence of their investment advice.
In addition, client-facing staff for example should meet professional competence requirements. By setting organisational requirements, MiFID II provides greater investment protection, since product development rules also apply to investment firms, for instance.
Investment firms are also required to report on the transactions they execute. To do so, they need client information such as passport number or national identification number, amongst other things. Passport details and identity information are used exclusively for supervisory purposes and are protected in accordance with European Legislation.
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Product intervention
Based on MiFID II/MiFIR, the AFM has the authority to take product intervention measures. This enables the AFM to prohibit or restrict the marketing, distribution or sale of a financial instrument or structured deposit. The AFM can also prohibit or restrict a type of financial activity or practice. The AFM may use this authority if there are significant investor protection concerns. The AFM can also use this authority if the financial markets, commodity markets or the financial system are threatened.
ESMA has prepared Q&As for this topic, which can be found in the document ESMA Q&As Investor Protection (Chapter 17).