By Remonda Z. Kirketerp-Møller
Founder and CEO, muinmos ApS
The financial crisis had its impact on our daily lives. Blame was placed on the financial sector, on the governments for having little regulation, and on the regulators for lacking guidelines on existing regulation. In the aftermath of the financial crisis, the regulatory pressure on the financial sector has increased, resulting in more complex regulation in an already heavily regulated sector.
The Markets in Financial Services Directives 2004/39/EC and 2014/65/EC (MiFID) permit EU investment firms authorized by their home member state to provide any or all of the investment services for which they have received authorization in other EU member states. Many investment firms today offering their products to clients operate an online business model that is based on the cross-border provision of such products to mass markets (also known as ‘passporting’). The passport system was built on the assumption that investment firms authorized anywhere in the EU will have met the same standards, and thus should in effect be treated as if they were locally authorized. However, European governments increasingly impose stricter rules or avoid creating clear guidance on very fundamental principles, thus creating a very uneven playing field. The local regulations may prevail and differ from one member state to the other, which reinforces the need for investment firms to review ...