MIFID II – Solution Bank

MiFID II – the Directive

The aim of MiFID II (entry into force: 3 January 2018) is the development of a single market for financial services in Europe, in which transparency and investor protection are guaranteed.
It includes various provisions that, in view of the obligation to act in the customer’s best interest, aim to ensure that investors receive correct information, address the potential conflicts of interest among parties and require adequate profiling of savers.

View the text of MiFID II (Directive 2014/65/EU).

Below we list some of the main innovations introduced by MiFID II in relation to the provision of investment services.

Advice

MiFID II introduces significant changes in this area, including the new concept of advice on an independent basis. Investment firms are thus required to inform clients:

whether or not the advice is provided on an independent basis;
whether the advice is based on a broad or on a more restricted analysis of different types of financial instruments;
whether they will provide the client with a periodic assessment of the suitability of the financial instruments recommended.

The fundamental principle lying at the basis of the service of investment advice remains investor protection, to be achieved through an assessment of appropriateness. This assessment is based above all on information collected about the client regarding:

his/her knowledge and experience in the investment field relevant to the specific type of product or service
the client’s financial situation, including his/her ability to bear losses;
his/her investment objectives including his risk tolerance.

Product Governance

MiFID II introduces a series of organisational requirements regarding the relationship between manufacturers and distributors of financial instruments. Manufacturers are required to define and apply a process for the approval of each financial instrument before it is marketed or distributed to clients. For their own part, distributors are required to contribute to the implementation of appropriate distribution strategies based on the characteristics of the target market.

For further information you can view the following documents:

QUANTITATIVE REPORT TOP 5 BROKERS / TOP 5 VENUES

In accordance with the provisions concerning best execution laid down in Article 27 of Directive 2014/65/EU of 15 May 2014, known as MiFID II, transposed by Article 47 of the Consob Intermediaries Regulation no. 20307/2018, below we provide the required data on the orders executed by the execution venues.

With reference to the period 1 January – 31 December 2023, we have published a document that specifies, for each class of financial instruments:

the top five execution venues where the bank directly executes client orders;
the top five investment firms (brokers) used by the bank..

The trading volumes and number of orders executed, expressed as a percentage of the total for each class, are reported for every venue/broker. In addition to the quantitative information there is a qualitative section which includes qualitative specifications relating to compliance with the established criteria for ensuring best execution, for both retail customers and professional clients.

REPORT ON THE QUALITY OF EXECUTION OF FINANCIAL TRANSACTIONS

The documents contained in this section have been drawn up in accordance with Article 27 (3) of Directive 2014/65/EU and Commission Delegated Regulation (EU) 2017/575 and published in accordance with the provisions of paragraph 1.5 – “Monitoring and verification of the quality and correct application of the order execution and transmission strategy” – of the Execution Policy currently in force.
The reports are used for the purpose of monitoring and verifying the quality of execution offered in relation to orders for financial instruments executed by the bank on own account.
The reports are produced for each financial instrument and each trading day. They are published on a quarterly basis and refer to the data for the previous quarter. They are divided into the following tables:

Any clarifications and in-depth analysis at the SOLUTION BANK branches.