The effectiveness of MiFID provisions for professional clients: a critical review

Abstract

Purpose

This paper aims to identify the duty of care that applies to ‘professionally classified clients’ based on the recently implemented Markets in Financial Instruments Directive II (MiFID II) as well as the previous Markets in Financial Instruments Directive I (MiFID I). The authors place critical notes on the effectiveness of some MiFID provisions.

Design/methodology/approach

The authors have reviewed the Delegated Acts of MiFID I and II, as well as Q&A’s of the European Regulator, ESMA and jurisprudence. The authors aim to add value by facilitating a discussion on the effectiveness of applicable MiFID provisions.

Findings

This review of the legal provisions provides researchers and practitioners in the investment sectors with a clear overview of the legal provisions detailing how these provisions should be met and how improvements to the provisions can be achieved.

Practical implications

This paper specifies what the provisions for professional classified clients are and facilitates a discussion on the effectiveness of these provisions.

Originality/value

Addressing the legal provisions which are applicable to ‘professional classified clients’ that derive from MiFID I and II and includes a critical analysis which offers an original perspective.

Citation

Loonen, T. and Pattiselanno, R. (2020), "The effectiveness of MiFID provisions for professional clients: a critical review", Journal of Financial Regulation and Compliance, Vol. 28 No. 1, pp. 1-15. https://doi.org/10.1108/JFRC-07-2018-0103