Does MiFID apply to investment firms that aren’t located in Europe?
It does if they are operating here and working with EU partners. For example, a bank in Honk Kong that has branches in the EU will have to follow this rule if they want to do business in this market. If Czech people come to its local branch and try to buy some shares and if this is settled through a Hong Kong broker, this broker has to be able to prove that the deal was executed according to their best execution policy. It isn’t that everybody around the world must start to implement something right now, but these brokers should have some evidence that their processes are under control. The whole responsibility lies with the local branches because these branches guarantee clients that the deal was settled and reported in the best way. Q: Could this reduce trade between European clients and investment firms outside the MiFID coverage? A: I think nobody believes in any real impact on [trade volume]. When you look at the system, someone might say that it would be tempting to do more busin
