Posts Tagged ‘MiFID’

BalticBusinessNews writes that Swedbank employee suspected of insider trading. Anton Uustalu, 27-year-old former employee of client relations department of Swedbank, is one of the suspects in insider trading scheme with Eesti Telekom stock.

Priit Perens, general manager of Swedbank Eesti, said that he could not comment the case and suggested that Äripäev asked the prosecution for comment. “Uustalu left on the mutual agreement,” was all that Perens said, without elaborating why Uustalu’s employment contract was terminated.

New York Times wrote that Estonian prosecutors charged Dmitri Vassiljev, a former analyst at SEB Enskilda, with using inside information to trade shares and options of the Baltic telecommunications companiess Eesti Telekom and TEO.

Mr. Vassiljev used information on TeliaSonera’s offer to buy out minority shareholders in the two companies to which he had access to before it was made public, the Tallinn-based state prosecutor’s office and Financial Supervisory Authority said Thursday in separate statements. Eesti Telekom rose 23 percent and TEO jumped 30 percent after the offer was announced
August 24th.

Comments from CSA Partners:

This case highlights the importance of proper systems and controls that investment banks and advisors should have in place in order safeguard inside information from their customers.

In particular:

• every member of the staff should be exposed to the information only on a need to know basis;
• flow of inside information should be rigorously controlled and list of insiders, with exact date and time when information was received, maintained;
• each employee who has obtained the access to the information, should be alerted about the fact that the information received, is inside information;
• adequate personal account dealing controls (e.g. list of restricted instruments) should prohibit members of the staff from making transactions (directly or via related persons) with securities issued by the customer.

The rules introduced by MiFID impose complex requirements on banks’ and investment firms’ organizational governance and internal compliance management.

CSA Partners is delighted to announce the release of the new INSIDeR Professional Edition, a complete internal compliance procedures and records management solution designed to meet the most challenging requirements on organizational governance of MiFID-firms.

INSIDeR Professional Edition is web-based special-purpose compliance management application designed for the implementation of high quality internal control procedures and workflows by MiFID-firms when, among other things, dealing with the following organizational requirements:

• Administration of the list of relevant persons and persons and corporations with close links to relevant persons
• Applying pre-trade clearance regime and keeping records on permissions with regard to personal account dealings (personal transactions) by relevant persons
• Keeping records on personal transactions
• Controlling and reducing the risks of Market Abuse
• Controlling and reducing the risks of conflict of interest
• Ensuring that relevant persons are aware of their obligations
• All the above available on the basis of self-service-model to multiply the efficiency of compliance procedures management across the organization.

INSIDeR Professional will be available on the basis of software-as-a-service model where CSA Partners provides the hosting, support and management of the solution for MiFID firms. That relieves firms from the burden and cost of maintaining and updating in-house systems and IT infrastructure. INSIDeR Professional Edition is available also per in-house installation model, should internal policies rule out software-as-a-service option.

“The Market in Financial Instruments Directive (MiFID) represents the most extensive reform ever seen by the European financial services industry. Key objectives of the MiFID include an increased level of investor protection and the integrity of markets throughout the European Union. These objectives have warranted the introduction of a range of organizational requirements and procedures for MiFID-firms. INSIDeR Professional is our response to help MiFID-firms’ compliance teams to deal with the most challenging of them, says Martin Villig, Managing Director of CSA Partners.”

The level 2 Regulation and Directive which implement the Markets in Financial Instruments Directive have now been published in the Official Journal.

Commission Regulation (EC) No 1287/2006 implements MiFID as regards record-keeping obligations for investment firms, transaction reporting, market transparency, and admission of financial instruments to trading, and Commission Directive 2006/73/EC implements MiFID as regards organisational requirements and operating conditions for investment firms.

Download the Regulation from:
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_241/l_24120060902en00010025.pdf

Download the implementing Directive from:
http://eur-lex.europa.eu/LexUriServ/site/en/oj/2006/l_241/l_24120060902en00260058.pdf

The European Commission has presented its formal drafts to the European Parliament and the European Securities Committee (ESC) for a series of technical measures implementing the Markets in Financial Instruments Directive (MiFID).

The MiFID is one of the corner stones of the Financial Services Action Plan which seeks to create a single market for financial services in Europe and is also a response to structural changes in the European securities markets.

The objective of the MiFID is to enable investors to invest and procure investment services across EU borders more easily, to remove obstacles to the use of the EU passport by investment firms, to foster competition and a level playing field between Europe?s trading venues, and to ensure appropriate levels of protection for investors and consumers of investment services across Europe.

The MiFID will play an essential part in building the more integrated, deeper and efficient capital market which Europe needs to lower the cost of capital, generate growth and boost its international competitiveness.

The proposed measures now being submitted to the European Parliament and the ESC are the so-called ’level 2’ measures(or ?implementation measures?) required under the ’Lamfalussy’ process; they will make operational the principles set out in the ’level 1’ Directive (IP/04/546).

The draft measures are being tabled after a very extensive round of intense consultations with all stakeholders over the last two years. They are designed to protect investors and consumers without imposing unnecessary compliance burdens on firms. The measures have been drafted to provide firms with clear and predictable rules and to give greater security to investors and consumers who buy services from foreign firms.

Internal Market Commissioner Charlie McCreevy said: ’These Level 1 measures agreed by Parliament and Member States bind us to a basic framework. Our draft Level 2 measures matter. They will provide a high level of protection for investors while keeping red tape to a minimum. They will also increase cross-border competition to the benefit of investors and issuers alike.

Our aim is to create a level playing field for firms and to provide clarity for investors, while at the same time ensuring that the new rules can be incorporated into national legal systems as Member States demand. I believe that we have accommodated both of these objectives.

I now look forward to working closely with the Parliament and the Member States over the next few months to find the widest consensus possible. Meanwhile, firms should start preparing now for MiFID: there will be a first-mover advantage.’

The proposed ’level 2’ measures are in line with the ’Level 1’ Directive which was adopted in April 2004.

In accordance with the ’Lamfalussy’ process, the draft measures have been sent to the European Parliament and the European Securities Committee (ESC) who will examine them over the next three months. Following the vote in the ESC, the European Parliament will have a one-month period to check that the limits set in the ’Level 1’ Directive have been respected, before the measures are adopted by the Commission, probably during summer 2006.

The recently approved extension Directive will push back the application date for the ’level 1’ Directive to November 2007. This is to allow firms to make the necessary preparations.

The formal drafts, together with background notes and frequently asked questions (MEMO/06/57), are available at:

http://europa.eu.int/comm/internal_market/securities/isd/mifid2_en.htm