CySEC Chair Demetra Kalogerou MiFID II Regulation Comments

CySEC chair in a live speech commented about MiFID II implementation and technical obstacles. covering CySEC Chair Demetra Kalogerou MiFID II Regulation Comments.

24 October, AtoZForex CySEC Chair Demetra Kalogerou addressed Forex industry participants during a seminar, which covered all aspects that are required of brokerages when MiFID II comes into force in January.

The seminar marks a milestone in addressing the companies that will be directly affected by the MiFID II rulings. It also is aimed at firms that lack information regarding their responsibilities post-implementation. Moreover, the event aims to inform the firms about implementation and requirements of MiFID II and its technical issues.

CySEC Chair Demetra Kalogerou MiFID II Regulation Comments

Addressing the event, Kalogerou explained that she intended to provide an overview of how CySEC views these regulations. She also focused on the AML (anti-money laundering) directive, explaining that she is also very concerned about that particular set of rulings.

MiFID, however, is absolutely not related, nor does it cover, any aspects relating to the Cyprus economic crisis. It is an infrastructure directive that OTC brokerages in the European Union must follow.

Mrs. Kalogerou commented also commented about the challenges for the industry:

“MiFID II is a big challenge for the regulators and the OTC derivatives industry. It starts on January 3, 2018, which is now very near. MiFID II and MiFIR will change the landscape of this business as we know it today.”

In addition, she continued:

“One of the key factors is that MiFID II mandates an approved market structure, and ESMA’s intention is to limit OTC transactions in financial markets and move some of the asset classes onto regulated markets which are represented by exchanges, multilateral trading facilities, and specific venues.” 

“In Cyprus, very recently, there was a report by ESMA that cited Cyprus as being the second biggest CFD transaction area in Europe after the UK on an OTC basis. This means that the regulator has a lot of work to do,” she added.

“Product governance is important” were Kalogerou’s generic musings, however, no explanation was given.

In terms of clearing obligations, the CySEC chair did not explain how retail Forex firms in Cyprus have to report this, but instead read verbatim the EMIR document on it, and referred delegates to circulars on connecting to a CCP to clear derivatives.

CySEC ESMA projects confirmation

CySEC has confirmed that it has outsourced two projects to ESMA. One is those being the accessibility of trade reporting data. Another is financial industry reference data.

Kalogerou explained that, along with most EU member states, these have been delegated to ESMA as a huge amount of resources are required to gather, validate and make an assessment of the data that is coming from firms across Europe. CySEC will continue to work on MiFIR to store quantitative and qualitative information via reporting mechanism to transfer to ESMA.

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