Advisers need to take note under Mifid II of the investors for whom asset managers say their funds are appropriate, and then they need to provide feedback to those groups where funds may have been sold outside the designated target market. Just how this will be done, and what fund groups will do with the feedback, is not yet clear.
Mikkel Bates is regulatory consultant at FE
Key aspects
Transaction costs
For Priips, these include the market impact, ie the price move between a deal being sent to a broker and being placed. This is not the case for Mifid II.
Ucits in scope?
Ucits funds are exempt until 2019 for Priips, though ‘mirror’ life funds that invest in Ucits are in scope. Ucits are not bound by Mifid II, but they will need to provide costs and charges to distributors.
Pre or post-sale reporting
Reporting is pre-sale only for Priips. Mifid II requires a pre-sale product and service costs projection, a post-sale quarterly valuation and annual costs and charges report, and notifications if a portfolio falls by 10 per cent.
