EU goes MAD
While there is much to examine in the proposals, an interesting (and we consider welcome) innovation appears in MiFID II governance procedures, imposing a responsibility in all directors to both assess and challenge the decisions of senior management. This duty is devolved on all executive and non-exec directors and will require knowledge, expertise and skill within boards. We have long supported the notion that banks should be governed by qualified bankers, even if it doesn't agree with FSA's notions; we await events.
MiFID II will extend remorslessly in other areas and we recommend close study of all changes.
MAD II should be examined with care. One new offence has caught our eye and should plug a gap in the armour - maybe. Market manipulation has always been a slippery customer and MAD II is having a crack at it by defining it. The bare bones looks for false or misleading signals or person(s) in collaboration to keep prices at an abnormal or artificial level. Proof will be in the pudding, but a virtuous act nevertheless.
Implementation is likely to take up to two years, although some parts could apply after publication of the Official Journal. An added delay is likely as member states usually must transpose the provisions into national laws.
Additional reading: the professional presses of accounting and law firms have been rolling all over the EU. It seemed invidious to choose between them so we suggest that you approach your favourite for early complimentary analysis.