MIFID II conference suggests investment advice should come at a cost

MIFID II has introduced quite a volume of new regulation and requirements with the objective of ensuring greater transparency and consumer protection in the provision of investments serviced. This new EU Directive was the subject of an afternoon conference organised recently by the Malta Law Academy jointly with the Commercial Law Department at the University of Malta to discuss the very topical subject of “MIFID II – Burdens, Challenges or Opportunities?”

MIFID II is a specialised topic which deals with a variety of issues and concerns. It is a subject that we needed to come to terms with and we were delighted that this conference was attended by a good number of law practitioners who had the opportunity to receive the views of leading financial services professionals,” commented Dr David Fabri, Head of the Commercial Law Department at the University of Malta, who chaired the afternoon conference.

The event was opened by Dr George Hyzler, president of the Chamber of Advocates who commended the Malta Law Academy whose seminars and conferences contribute to raising the standards of all those in the legal profession. In this context, he raised the pending issue of the way the legal profession is regulated. “It is ironic that the Bar Association in Malta is probably the only one in the world not yet formally regulated by law. At a time when standards in this country seem to be sidelined, we will keep pushing for our legal profession to be safeguarded and strengthened,” Hyzler said.

Following an introduction by Dr David Fabri, different speakers dealt with a variety of aspects related to the new Directive. Dr Andre Zerafa from Ganado Advocates spoke about “The services of investment advice and execution – differences and pitfalls”; Dr Laragh Cassar from Cassar Camilleri Advocates addressed the topic “The reverse solicitation exemption under MIFID II”; Dr Katya Tua from Mamo TCV Advocates discussed “the Impact of MIFID II on cases brought before the Arbiter for Financial Services”; and Dr Louis Degabriele from Camilleri Preziosi Advocates concluded with the topic “The new MIFID II inducements and fees regime”.

The talks were followed by a very interesting panel discussion moderated by Edward Grech from the MFSA with the participation of David Curmi from Curmi & Partners and Edward Rizzo from Rizzo, Farrugia Stockbrokers who gave a practical viewpoint of how the industry is looking at MIFID regulation. Many interesting points and suggestions were raised.

Edward Rizzo noted that many investors are still broadly unaware of the implications of MiFID II. They generally view this as added bureaucracy without fully appreciating the protection and the advantages that MIFID II has introduced. On the other hand, David Curmi said that only IT can help support financial services practitioners deal with the increased workload and monitoring they have to carry out on a daily basis. In view of the additional investment required in IT and human resource to comply with MiFID II, financial services practitioners would need to start charging advisory fees for investors requesting advice.

Dr David Fabri addressing the conference