The increase in the regulation of securities and
financial markets since 2008 will reach its peak in 2018 (with
the revised set of Basel IV regulations arriving only,
hopefully, in 2027).
In the past few years, the EU has pushed through a reform
agenda that strengthens both conduct and prudential regulation.
This movement, together with the aim to build an integrated EU
financial market, gave rise to a prolific amount of
legislation: among which, most recently, are the Markets in
Financial Instruments Directive II (Mifid II), the Markets in
Financial Instruments Regulation (Mifir) and the revised
Payment Service Directive (PSD2).
The effects of this legislation are only now coming to
fruition as EU member states start implementing the new
A cornerstone of EU financial services law, Mifid II/Mifir
entered into force in January 2018 strengthening investor
protection and aiming to improve the functioning of financial
markets to make them more efficient, resilient and transparent.
In the words of the European Securities and Markets Authority
(Esma), they 'ensure fairer, safer and more efficient markets
and facilitate greater transparency for all participants'. It
will take substantial efforts by banks and markets to ensure
compliance with the new set of rules, specifically with respect
to how organisations collect and manage their information data.
Mifid II should have been transposed into national law by
January 3 2018. However, Portugal, like other EU member states,
has not yet transposed the framework though this is expected to
occur any time soon.
PSD2 should have been implemented into national law and
regulation across the EU by January 13. This will enable bank
customers, both consumers and businesses, to use third party
providers to manage their finances, with banks being obliged to
provide these third-party providers access to their customers'
accounts through open application programme interfaces (APIs).
This will create new competition in one of the core businesses
of banks, but also new market opportunities to offer new
services and capture costumers. The transposition of this
directive has not yet occurred but the relevant legislative
procedures are underway and are expected to be finalised during
the second quarter of 2018.
Interesting and demanding times lie ahead for EU banks and
financial markets but it is possible that the full effects of
the new rules will only begin to be felt during the second half
|Bruno Azevedo Rodrigues
||Frederico Félix Alves