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Impacts des nouvelles réglementations sur les métiers du Private Banking Gevolgen van de nieuwe regulering voor Private Banking 20 02 2017

21/02/2017 1

Program

Presentations:

• Jean-Paul Servais, President of the FSMA
• Guillaume Prache, Directeur-général of Better Finance
• Michel Buysschaert, President of the Management Board of

Van Lanschot Bankiers

• Benoît Daenen, Head of Private Banking of Bank Degroof Petercam

Panel discussion / Q&A

• Marc Lambrechts, financial journalist at L’Echo

Impacts des nouvelles réglementations sur les métiers du Private banking (MiFID II)

Jean-Paul SERV AIS, Président FSMA

Vice-président de l’IOSCO/OICV Président de l’IFRS Monitoring Board Professeur à l’ULB

Belgian Finance Club, le 20 février 2017

• 1. Contexte (1)
• Leçons de la crise financière:

Ø Produits financiers de plus en plus complexes Ø Misselling Ø Inducements

• Actions: Développement de nouveaux outils et de

nouvelles réglementations pour contribuer à une meilleureprotectiondes consommateursfinanciers

4 MiFID II 20/02/2017

• 1. Context (1)
• Lessen uit de financiële crisis:

Ø Steedscomplexerefinanciëleproducten Ø Misselling Ø Inducements

• Actie: Ontwikkeling van nieuwe tools en nieuwe

regelgeving om bij te dragen tot een betere bescherming van de financiëleconsument

5 MiFID II 20/02/2017

• 1. Contexte (2)
• En Belgique (trajectoire assurée avec succès, depuis 2011):

Ø Moratoire sur les produits structurés particulièrement complexes Ø Interdiction de certains types de produits et formes de commercialisation (options binaires, life settlements, …) Ø Inspections & mystery shopping Ø Nouveaux statuts Ø …

• Au niveau européen: MiFID II, PRIIPS, IDD (Insurance

distribution directive)

6 MiFID II 20/02/2017

• 1. Context (2)
• In België (traject met succes afgelegd sinds 2011):

Ø Moratorium

• p

bijzonder ingewikkelde gestructureerde producten Ø Verbod

• p

bepaalde types producten en commercialiseringswijzen (binaire opties, life settlements, …) Ø Inspecties & mystery shopping Ø Nieuwe statuten Ø …

• Op Europees niveau: MiFID II, PRIIPS, IDD (Insurance

distribution directive)

7 MiFID II 20/02/2017

• 2. Les nouveautés prévues par MiFID II/MiFIR concernant

les règles de conduite (en résumé)

8

gestion de portefeuille conseil en investissement exécution d’ordres portant sur des instruments complexes ou consécutivement à une initiative de l'entreprise exécution instruments non-complexes et initiative du client

• portée de la notion de

conseil

• conseil indépendant
• inducements
• moins d'instruments

financiers automatiquement non- complexes suitability test appropriate-ness test execution-only gouvernance (produit, rémunération), best execution, costs and charges, product intervention, conflits d’intérêts

MiFID II 20/02/2017

2.1. Gouvernance produits (1)

• « Know your products »

Ø Définir une politique concernant les services, activités, produits, transactions

• fferts
• u

fournis, tenant compte des caractéristiques et besoins des clients cibles. Ø Fabricants et distributeurs Ø Directive déléguée Ø Orientations attendues

• « Staff qualification »

Ø Personnel avec les compétences, les connaissances et l’expertise adéquats Ø Orientations sur l’évaluation des connaissances et des compétences (22/03/16,ESMA/2016/1886 FR)

9 MiFID II 20/02/2017

2.1. Gouvernance produits (2)

Instaurer des politiques et des dispositifs (y compris impliquer l’organe de direction et la fonction de compliance), documenter le processus Comprendre et tester les produits, gérer les conflits d’intérêts et identifier les besoins en matière de formation Identifier le marché cible positif et négatif Echanges d’informations Approbation de chaque produit ou service Suivre/revoir les produits et les canaux de distribution ainsi que les politiques et dispositifs, entreprendre les actions nécessaires

MiFID II 10 20/02/2017

• Clarifier sur quelle base le conseil est fourni:

Ø Conseil fourni sur une base indépendante ou pas? Ø Conseil basé sur une analyse large ou limitée du marché ? Ø Evaluation permanente du caractère adéquat des instruments recommandés ?

• Conseil indépendant ?

Ø Eventail suffisant d’instruments financiers disponibles sur le marché Ø Ne se limite pas aux instruments émis par l’entreprise elle-même ou des entreprises liées Ø Pas d’incitations (inducements)

11

2.2. Conseil en investissement (1)

MiFID II 20/02/2017

• Rapport d’adéquation

Ø préciser comment le conseil fourni tient compte des caractéristiques personnelles du client Ø expliquer les raisons du conseil fourni

12

2.2. Conseil en investissement (2)

MiFID II 20/02/2017

• Renforcement de la protection des consommateurs en

limitant les types d’instruments financiers pouvant être commercialisésen execution only

• Critères importants:

Ø Liquidité de l’instrument financier Ø Pas de dérivés ‘embedded’ Ø Pas de structure qui fait en sorte que le client ne comprend pas les risques liés au produit financier

13

2.3. Execution-only (1)

MiFID II 20/02/2017

• Versterking van de bescherming van de consument door

een beperking van de types financiële instrumenten die in execution only gecommercialiseerdmogen worden

• Belangrijke criteria:

Ø Liquiditeit van het financiële instrument Ø Geen ‘embedded’ afgeleide producten Ø Geen structuur die ertoe leidt dat de cliënt de risico’s niet begrijpt die verbonden zijn aan het financieel product

14

2.3. Execution-only (1)

MiFID II 20/02/2017

• Seuls les OPCVM (UCITS) non structurés sont maintenant

automatiquement des instruments financiers non complexes (OPCVM (UCITS) structurés et OPC (non UCITS) = instrumentsfinancierscomplexes)

• Seules

les

• bligations

cotées sont maintenant automatiquement des instruments financiers non complexes,à l’exclusion des obligationsqui :

a) incorporent un instrument dérivé ou b) présentent une structure qui rend la compréhension du risque encouru difficilepour le client

15

2.3. Execution-only (2)

MiFID II 20/02/2017

• Structure qui rend la compréhension du risque encouru

difficile pour le client ? Orientations de l’ESMA sur les titres de créance complexes et les dépôts structurés (04/02/16, ESMA/2016/1787 FR)

16

2.3. Execution-only (3)

MiFID II 20/02/2017

• Interdiction des inducements dans le cadre de la gestion de

portefeuille ou du conseil indépendant

• Pour les autres services : directive déléguée reprenant des

critères précisant la portée du “enhancement test”

• Encadrement spécifique de la recherche en investissement :

traditionnellement, la recherche est “reçue” en échange d’un flot d’ordres è fin de cette pratique (critères spécifiques figurant dans la directive déléguée)

• Encadrement plus étroit des rémunérations (définition d'une

politique assurant un traitement équitable des clients et évitant les conflits d'intérêts)

17

2.4. Incitations et rémunérations

MiFID II 20/02/2017

• Transparence accrue concernant la “best execution policy” (e.a.

communication des plateformes et entités, paiements reçus de tiers, lier les frais aux services pertinents et utilisation d’entités uniques)

• Les entreprises d’investissement communiquent le top cinq des

plateformes sur lesquelles elles ont exécuté des ordres de clients ainsi que des informations sur la qualité de l’exécution

• Les plateformes d’exécution publient les informations relatives à

la qualité de leur exécution (execution quality data)

18

2.5. Best execution

MiFID II 20/02/2017

• Grotere transparantie over de “best execution policy” (o.a.

communicatie over de platformen en entiteiten, betalingen

• ntvangen van derden, kosten in verband brengen met de

geleverde diensten, …)

• De beleggingsondernemingen communiceren de top vijf van de

platformen waarop ze cliëntenorders hebben uitgevoerd alsook informatie over de kwaliteit van de uitvoering

• De platformen publiceren informatie over de kwaliteit van hun

uitvoering (execution quality data)

19

2.5. Best execution

MiFID II 20/02/2017

• Plus d’informations au sujet des coûts et frais

Ø y compris l’effet cumulé des coûts et frais sur le retour sur investissement

• Obligation de signer un contrat avec le client

Ø y compris lorsque du conseil en investissement est fourni à tout moment (on an on-going basis)

20

2.6. Informations relatives aux coûts et frais et au contrat avec le client

MiFID II 20/02/2017

• Meer informatie over kosten en lasten

Ø Ook over het gecumuleerd effect van kosten en lasten op het rendement van de belegging

• Verplichting om een contract te tekenen met de client

Ø Ook wanneer doorlopend beleggingsadvies gegeven wordt (on an on-going basis)

21

2.6. Informatie over kosten en lasten en over het contract met de cliënt

MiFID II 20/02/2017

• Les informations fournies et les règles de conduite ne

sont pas toujours suffisantes

• « Product intervention» :

Ø Interdire ou restreindre :

§ la commercialisation, la distribution ou la vente de certains instruments financiers ou d’instruments présentant certaines caractéristiques ou

§ certaines activités ou pratiques financières

Ø ESMA ou autorités compétentes Ø Motivation et procédure

• Intervention ex-ante possible : anticiper les problèmes

22

2.7. Product intervention

MiFID II 20/02/2017

• De geleverde informatie en de gedragsregels zijn niet

steedsvoldoende

• « Product intervention» :

Ø Verbieden of beperken:

§ de commercialisering, de distritbutie of de verkoop van bepaalde financiële instrumenten of instrumenten die bepaalde kenmerken vertonen

• f

§ bepaalde activiteiten of financiële praktijken

Ø ESMA of bevoegde autoriteiten Ø Motivering en procedure

• Ex-ante interventie mogelijk : anticiperen op problemen

23

2.7. Product intervention

MiFID II 20/02/2017

• Régime renforcé
• Nouveautés:

Ø Exigences générales supplémentaires concernant la prise ferme

• u le placement

Ø Exigences supplémentaires concernant la cotation des offres liées à l’émission d’instruments financiers Ø Exigences supplémentaires concernant le placement Ø Exigences supplémentaires concernant le conseil, la distribution et le self-placement Ø Exigences supplémentaires concernant les prêts

• u

la fourniture de crédits dans le contexte de la prise ferme ou du placement

24

2.8. Conflits d’intérêts

MiFID II 20/02/2017

Nouvelles exigences organisationnelles pour les entreprises qui recourent au trading algorithmique ou qui fournissent un accès électronique direct à une plateforme de négociation

Ø Systèmes et contrôles des risques efficaces et adaptés, plans de continuité (objectifs : systèmes de négociation résilients, capacité suffisante, éviter l’envoi d’ordres erronés et les abus de marché) Ø Tenue d’un registre des ordres (en cas de trading algorithmique à haute fréquence) Ø Règles spécifiques pour la mise en oeuvre d’une stratégie de tenue de marché via le trading algorithmique Ø Mesures de surveillance des transactions réalisées via l’accès électronique direct

25

2.9. Trading algorithmique

MiFID II 20/02/2017

Conclusions

20/02/2017 MiFID II 26

Impact of the new EU rules on private banking

The individual investor view

Guillaume Prache Managing Director of Better Finance

27

Belgian Finance Club Brussels, 20 February 2017

A lot of new EU rules to be rolled out soon

• MiFID II : 1/1/2018
• PRIIPs (Packaged Retail insurance-based and investment

Products): 1/1/2018 to 31/12/2019

• IDD (Insurance Distribution Directive): entered into force on 23

February 2016 ( the deadline for the transposition of the directive is on 23 February 2018)

• Prospectus Regulation
• Shareholders rights II Directive (article 3c)

28

Belgian Finance Club - Brussels, February 2017

MiFID II

• Independent and “non independent” advice: quality

improvement test

• Product governance
• Suitability/Appropriateness
• Product intervention

29

Belgian Finance Club - Brussels, February 2017

MiFID II Issues

• Future of “open architecture” distribution
• Fair and not misleading information:
• MiFID II : Section II “Provisions to ensure investor protection” , Article 24

“General principlesand information to clients”,Directive 2014/65/EU: “3. All information, including marketing communications, addressed by the investment firm to clients or potential clients shall be fair, clear and not misleading. Marketing communications shall be clearly identifiable assuch.” Other rules

PRIIPs: SECTION II “Form and content of the key information document”, Article 6.1 Regulation (EU) No 1286/2014 « The key information document shall constitute pre-contractual information. It shall be accurate, fair, clear and not misleading. It shall provide key information and shall be consistent with any binding contractual documents, with the relevant parts of the offer documents and with theterms and conditions of the PRIIP”. UCITs KIID: REGULATION (EU) No 583/2010 Article 3 “Principles regarding the key investor information document" , 2, "The key investor information shall be fair, clear and not misleading”.

30

Belgian Finance Club - Brussels, February 2017

MIDID II / PRIIPS issues on product information: example I ( 1/2)

31

Belgian Finance Club - Brussels, February 2017

MIDID II / PRIIPS issues on product information: example I ( 2/2)

32

1.00 1.16 1.18 0.67 0.82 0.81 0.65 0.78 0.93 0.94 1.05 1.00 1.21 1.26 0.75 0.96 0.96 0.83 1.00 1.23 1.26 1.41 0.60 0.70 0.80 0.90 1.00 1.10 1.20 1.30 1.40 1.50 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 CAC40 "index fund" CAC40 GR index

Belgian Finance Club - Brussels, February 2017

MIDID II / PRIIPS issues on product information: example II

33

Belgian Finance Club - Brussels, February 2017

Source: EFAMA

Thank you for your attention!

34

Belgian Finance Club - Brussels, February 2017

Michel Buysschaert Van Lanschot Bankiers Brussel, 20 februari 2017

Belgian Finance Club

Agenda

1. Introduction 2. Mifid How does Van Lanschot prepare for MifidII 3. Provisieverbod in Nederland

36

• 1. Introduction

The banking crisis has resulted in a profound impact affecting all financial institutions up till today (and for many years to come). The impact can broadly be categorized in 3 pieces:

• Prudential
• Regulatory
• “Paying the bill”, i.e. increased indirect taxation through bank levies

37

• 1. Introduction: evolution bank levies

38

• 1. Introduction: overview regulatory work at Van

Lanschot over last 5 years

A) Last 5 years:

Wet Laruelle Wijzigingen aan consumentenkredietwetgeving Transversaal KB Wet financial planners PSD I Marktmisbruik EMIR Kennisvereisten inzake kredietverlening Afwikkeling van kredietinstellingen Fiscale regularisatie, ronde 3 & 4 FATCA Speculatietaks Wetgeving bankentaks Single resolution fund Rijkentaks CRS Reynderstaks Roerende voorheffing Beurstaks Beurstaks op buitenlandse verrichtingen Rapportage Centraal Aanspreekpunt (CAP) Country by country reporting Maatregel Michel beperking aftrekken voor banken Kaaimantaks Rapportage betalingen belastingparadijzen

39

• 1. Introduction: overview regulatory work at Van

Lanschot over last 5 years

B) Current: ü Mifid II: 03/01/2018 ü Privacy : 25/05/2018 ü 4de witwasrichtlijn: 26/06/2017 ü PRIIP’s: 01/01/2018 ü Nieuwe wet hypothecaire kredieten: 01/04/2017 ü PSD II: 13/01/2018 Projects become broader and with deeper impacts on the organisation (including increasing costs) and

• n the business models

40

• 2. Mifid: How does Van Lanschot prepare for Mifid

II

MiFID II: Impact op Van Lanschot Groep

42

Private Bank – high impact topics Mogelijke strategische impact

• Product governance (distributer)
• (On)afhankelijk advies – Verbod op

retrocessies Belangrijke impact

• Transaction reporting
• Investor protection (Transparantie naar de

klant dmv TCO, rapportages ed, geschiktheidsverklaring en –toets)

• Bewaren Cliëntinformatie

Asset Manager - high impact topics Mogelijke strategische impact

• Unbundling Research en provisieverbod
• (On)afhankelijk beleggingsadvies

Belangrijke impact

• Verhoogde bescherming van de belegger

(‘client’ ipv ‘retail client’), bijvoorbeeld door TCO en informatieverstrekking

• Product governance (manufacturer én

distributer) Merchant bank - high impact topics Mogelijke strategische impact

• Unbundling Research

Belangrijke impact

• (Handelsverplichting via) trading venues
• Product governance (SP-desk als

manufacturer)

• Best execution
• Transaction reporting

MiFID II - Projectstructuur

43

Kenniscentrum

Juridische Zaken en Compliance

Besturing & Governance Product Governance Programma Management Management Comité Orderafhandeling/ Best Execution Total Cost of Ownership Geschiktheidstoets Geschiktheidsverklaring Beleggersbescherming Organisatie Bewaren Cliëntcommunicatie Transaction Reporting Rapportering aan cliënten Vakbekwaamheid Beloning Belangenconflicten Markt Vermogensscheiding Provisies (On)afhankelijk advies Informatieverstrekking

MiFID II – impact dienstverlening private bank

44

Beheer Advies Execution Only

Geschiktheidstoets Geschiktheidsverklaring (On)afhankelijk advies Bewaren cliënt informatie Product Governance Informatieverstrekking Rapportages naar cliënten Total costs of ownership (TCO) Transaction reporting Orderafhandeling

Ook organisatorische vereisten moeten worden ingeregeld, op het gebied van vermogensscheiding, vakbekwaamheid, belangenconflicten, besturing, governance, beloning en reporting infringement.

• 3. Provisieverbod in Nederland

Doel:

• nderdeel van ruimer kader van herstel van vertrouwen in de financiële sector en diens producten

→ streven naar transparantie en onafhankelijkheid

• Provisieverbod sinds 01/01/2014 voor niet-professionele klanten en dit voor VB, advies en E.O.

ØVoor 01/01/2014: lage (of geen) rechtstreekse kosten voor klanten want “onzichtbare opbrengst achter de schermen” ØNà 01/01/2014: stijging van de rechtstreekse kosten, maar transparantie en vergelijking mogelijk ØOp lange termijn: ??? (waarschijnlijk prijsdruk)

45

• 3. Provisieverbod in Nederland (vervolg)
• Gevolgen: + en –

ØVerschuiving uit advies naar VB en E.O. Vooral de groei in E.O. was zeer fors (20% + nog eens 20% intentie) ØKlanten werden, waar mogelijk, geswitched naar (goedkopere) retrocessie-vrije share classes van fondsen (echter niet altijd voorhanden of passend) ØMeer gesloten architectuur ØOpkomst mandaatfondsen: profielfondsen en managed fondsen ØMeer passief beleggen: prikkel dure actieve producten te verkopen is weg ØToekomst advisory ØM&A: consolidatie

46

MiFID II

MiFID 2 – impacts overview February the 20th 2017 Benoit Daenen – Degroof Petercam

Main changes introduced by MiFID II / MiFIR 4.

Product governance Best execution Ban on inducements (IA & PM) Investment advice Safeguarding of clients assets Suitability / appropriateness Information requirements on costs & charges Reporting Recording of telephone & electronic communications Product intervention Increased equity market transparency Sanctions

Topic What Who Types of services

Product Approval Process Target market definition and set-up of constraints within the systems to ensure that financial instruments are only sold to clients within the target market Retail clients Professional clients Issuance and distribution of financial instruments Obtain product information of reliable and adequate standards to ensure product is distributed in accordance with characteristics, objectives and needs of the target market Use manufacturer’s target market information in determining their own target market and distribution strategy for a target market. This is without prejudice to appropriateness or suitability assessment Firms which offer or recommend financial instruments they do not manufacture must also have in place appropriate governance arrangements, including ensuring that they understand the features of the products they distribute.

Product Approval Process

Product ApprovalProcess : impacts

l IT issue l More controls ex-ante & ex-post l Perception of customers having less freedom/choice in their investments ¦ IT / Controls

Topic What Who Types of services

Best execution The execution policy must be provided in sufficient detail and in clear, easy to understand language. Retail clients Professional clients Issuance and distribution of financial instruments Investment firms must summarize and make public, for each class of financial instrument, the top five execution venues where they executed client orders in the preceding year. . Firms should not receive any remuneration for routing clients’ orders to a particular trading or execution venue if this is not compliant with conflicts of interest and inducements rules. Selection and payment of investment research from 1/3 parties and disclosure to the clients of the costs of the researches

Best Execution

Best execution : impacts

l IT issue l Does the customer really matters? ¦ IT issue

Topic What Who Types of services

Inducement Ban on inducements for clients in discretionary management or independent advice Inducements for clients in nonindependent advice or execution only are subject to enhancement of the quality of the services and disclosure to the clients Retail clients Professional clients Eligible counterparties Portfolio management Independent advice Non independent advice Execution only Detail of the retrocessions to be communicated to the customers: description and pricing supplied separately. Mode of calculation beforehand and the exact amount a

• posteriori. At least once a year, as long as the investment company receives

incentives in connection with investment services supplied to the customers, it informs these individually about the real amount of payments or advantages received or paid.

Inducements

Inducements : impacts

l Competitors have to chose between non independent / independent advice l Inducements are subject to enhancement of the quality of the service and disclosure to the clients l More information about payments or advantages paid and received ¦ Business model will simplify ¦ New equilibrium will be reached :

—

Less services if customers disagree to pay (digital)

—

Price adjustments

Investment advice

Investment Advice Investment firms are required to inform their clients of:

• whether or not their advice is being provided on an independent basis;
• whether the advice is based on a broad or more restricted analysis of different

types of financial instruments and;

• whether the investment firm provides the client with a periodic assessment of

suitability. Retail clients Investment advice (with agreement) Ad-hoc investment advice Investment firms providing independent advice will have to assess a sufficient range of financial instruments available on the market. The instruments should not be limited to financial instruments issues or provided by the investment firms themselves or by entities linked to them. Ban on inducements in case of independant advice Before the transaction is made, provide the retail client with a statement in a durable medium including an outline of the advice given and how the recommendation is suitable for the client (or the day after if authorized by the agreement)

Topic What Who Types of services

Investment advice : impacts

l Communication with customers will be a challenge l IT l Contol ex-ante & ex-post ¦ Business model will simplify to deal with complexity

Topic What Who Types of services

Investment profile Test the actual knowledge of the client (appropriateness & suitability test) Define the “ability to bear losses” (suitability test) Necessary knowledge & experience of the employees Retail clients Professional clients Portfolio Management Investment advice (with agreement) Ad-hoc investment advice Execution only Alignment between natural and legal persons Reporting obligations in respect of portfolio management are also applicable to professional clients.

Suitability & Appropriateness

Suitability & Appropriateness

Complex & Non Complex Financial Instruments Define the complex and non complex financial instruments Retail clients Orders execution Set-up of an appropriateness test Recording of the appropriateness assessments

Topic What Who Types of services

Suitability & Appropriateness : impacts

l In the continuity of MiFID I l IT l Contol ex-ante & ex-post ¦ Reduce cost of managing info gathered

Topic What Who Types of services

Costs & charges Regular (at least annually) information (during the life of the investment) on all costs and associated charges (aggregated to understand the over-all cost and the cumulative effect: and with an itemized breakdown if requested), including:

• Charges related to investment and ancillary services
• Cost of advice, where relevant
• Cost of financial instruments recommended or marketed to the

client

• Method of payment
• Details of any third-party payments

Retail clients Professional clients Eligible counterparties All Information on all costs and associated charges must include information relating to both investment and ancillary services, including the cost of advice, where relevant, the cost of the financial instrument recommended or marketed to the client and how the client may pay for it, also encompassing any third-party payments. Firms will to aggregate them in order to allow clients to understand the overall cost as well as the cumulative effect on return of the investment. All

Costs & Charges

Cost & charges : impacts

l An new IT challenge ¦ New IT costs

Topic What Who Types of services

Recording of telephone & electronic communication Investment firms need to record: 1.relevant telephone conversations 2.face-to-face meetings (summary report) 3.electronic communications relating to own account and clients transactions. Clients must be notified that telephone conversations will be recorded. The records must be sufficient to establish the terms of any order placed by a client as well as to detect potential market abuse. Such records will need to be provided to the client on request. Retail clients Professional clients Eligible counterparties Investment advice (with convention) Ad-hoc investment advice Execution only

Recording of telephone & electronic communication

Topic What Who Types of services

Records keeping Extended number of information to be reported to authorities (65 fields instead of 23) Retail clients Professional clients Eligible counterparties Portfolio Management Investment advice (with convention) Ad-hoc investment advice Execution only Record keeping of client orders and decision to deal Record keeping of transactions and order processing Investment firms should keep at least the records identified in the table of ESMA (see ESMA 2.5) depending upon the nature of their activities.

Recording of telephone & electronic communication

Reporting to clients The periodic report shall contain an updated statement of how the investment meets the client’s preferences, objectives and other characteristics of the retail client. Retail clients Professional clients Eligible counterparties Portfolio Management Investment advice (with convention) Ad-hoc investment advice Execution only Reporting obligations in respect of portfolio management are also applicable to professional clients. Reporting obligations on losses in respect of portfolio management or contingent liability transactions. ESMA recommends aligning the execution reports (content, timing) for professional and eligible counterparties with the ones for retail clients.

Reporting to clients

Topic What Who Types of services

Recording… : impacts

l Formalize existing processeses l CRM l Controls ¦ Need to simplify to control risks!

Topic What Who Types of services

Reporting to markets and supervisors Reporting to competent authority or via ARM or trading platform: transmitter exemption (when orders are transmitted to another investment firm/broker). Extended scope vs MiFID I of transactions to be reported: . Instruments admitted to trading on an MTF, OTF or RM . Financial instruments where the underlying instrument is traded on a trading venue Extended number of information to be reported to authorities (65 fields instead of 23) Retail clients Professional clients Eligible counterparties Portfolio Management Investment advice (with convention) Ad-hoc investment advice Execution only

Transactions reporting to authorities

Topic What Who Types of services

Safeguarding of clients assets: MiFID II Investment firms shall, when holding financial instruments and money belonging to clients, make adequate arrangements so as to safeguard the ownership rights of clients, especially in the event of the investment firm’s insolvency, and to prevent the use

• f a client’s financial instruments on own account.

Retail clients Professional clients Eligible counterparties Portfolio Management Investment advice (with convention) Ad-hoc investment advice Execution only Safeguarding of clients assets: SGD La directive européenne sur les systèmes de garantie des dépôts (SGD) de 1994 a été révisée en 2014 et a fait l’objet de modifications substantielles. La directive n’a pas encore été totalement transposée en droit belge. La directive nécessite des modifications supplémentaires au niveau des modalités pratiques d’octroi, de calcul et de paiement des indemnisations, de l’information du déposant et de la gestion des ressources financières.

Safeguarding of clients assets

Topic What Who Types of services

Product intervention MiFIR gives EU and national regulators new powers to temporarily or permanently prohibit or restrict the marketing, distribution or sale of certain financial instruments and structured deposits, financial activities and practices in case of significant investor protection concern or a threat to financial stability or the orderly functioning and integrity of markets (and subject to a number of legal conditions to be fulfilled). Retail clients Professional clients Eligible counterparties Portfolio Management Investment advice (with agreement) Ad-hoc investment advice Execution only MiFID II introduces a new market structure framework which closes loopholes and ensures that trading, wherever appropriate, takes place on regulated platforms and on a level playing field. In particular, MiFID II introduces two types of trading obligations for different financial instrument classes:

• shares in the future have to be traded on a MiFID II multilateral venue or

via a so-called systematic internaliser, except for a limited set of irregular or technical trades; and

• derivatives which are eligible for clearing under the European Markets

Infrastructure Regulation (EMIR) and pass a liquidity test have to be traded

• n one of the MiFID II multilateral venues only. This will move trading in

these instruments onto well regulated platforms. MiFID II introduces a new multilateral trading venue, the Organised Trading Facility (OTF), for non-equity instruments to trade on organised multilateral trading platforms.

Product intervention

Sanctions

The agreement strengthens the existing regime to ensure effective and harmonised administrative sanctions. The use of criminal sanctions is framed so as to ensure the cooperation between authorities and the transparency of sanctions.

Conclusions

l Overall simplification of the industry l Digital will help to reduce info maintenance costs l IT costs will increase l Price adjustments

Thank you.

Next conferences

• 24 April 2017 :

« How to promote the Brussels financial place after the Brexit ? »

• 19 June 2017 :

« The nationalisation of the financial system »