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The Post-MiFID Financial World. László Seregdi June 15, 2007 Split. Agenda. Introduction of HFSA Main effects of MiFID Issues for integrated supervisors Questions Conclusions. Introduction of HFSA. Government agency, separately from NBH Integrated supervision Financed by the industry

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the post mifid financial world

The Post-MiFID Financial World

László Seregdi

June 15, 2007


  • Introduction of HFSA
  • Main effects of MiFID
  • Issues for integrated supervisors
  • Questions
  • Conclusions
introduction of hfsa
Introduction of HFSA

Government agency, separately from NBH

Integrated supervision

Financed by the industry

Institution and market supervision

Nearly 2000 institutions + individuals

Staff: 500

Supervisory Council

MiFID implementation in Hungary

main effects of mifid
Main effects of MiFID
  • Capital requirement + rules of internal procedures

- this is a guiding principle also in banking and insurance sector

- stronger internal regulation of service providers

- more proactive, risk based supervision

main effects of mifid1
Main effects of MiFID

2. Focused on client

- best execution (Elements of best execution (price, speed, type of transaction etc.), best execution policy, monitoring and review, new risk for service providers

- client classification (suitability and appropriateness test)

- transparency: need for a better financial culture and education

main effects of mifid2
Main effects of MiFID

3. Need for a new supervisory approach

- Close connection (not only through examinations, information sharing)

- Guidelines, transparent supervisory work

- Examination of outsourced activity

- Hungary: MiFID Panel, 6 meetings, consultations, problems, documents on internet, transaction reporting system

issues for integrated supervisors
Issues for integrated supervisors
  • Main principles can be used also in banking and insurance sector (best execution, transparency etc.)
  • Need for further harmonization: outsourcing, compliance officer, client classification, agents
common elements of mifid and crd
Common elements of MiFID and CRD

Requirements for managers

Internal governance and risk management


Supervisory tools

Transparency (institutions and supervisors)

Co-operation between supervisory authorities

Internalization- pricing

  • Future role of MTFs and exchanges
  • Internalization (cost-benefit)
  • Single passport (how to collect data on activity)
  • Effect on EU competitiveness (strong regulation vs. higher administrative cost)
tasks of the institutions
Tasks of the institutions
  • Internal procedures, regulations
  • Compliance function
  • Decision on internalization
  • Decision on MTF
  • IT developments
  • Client categorization
  • Best execution principle
  • Outsourcing
tasks of the supervisors
Tasks of the supervisors
  • Creating legislative background, discussions
  • Guidelines and recommendations
  • Licensing
  • Information sharing with other supervisors
  • List of market instruments
  • List of liquid shares
  • List of systematic internalizers

Preparation is time-consuming

Close co-operation between supervisors and market participants

Long list of practical questions

Common principles in other financial sectors