MiFID is a commonly used abbreviation for the «Markets in Financial Instruments Directive». This Directive is one of a number of Directives issued by the European Union to harmonise the laws and regulations in a single market for investment and financial services across all countries in the European Economic Area, commonly known as the «EEA». The EEA is comprised of the member countries of the European Union plus Iceland, Norway and Lichtenstein.
This Directive has been incorporated into Greek Law with Law 3606/2007 and comes into effect on 1st November 2007.
MiFID has as its objective to provide additional protection to investors and consumers of investment services. Many of the issues covered by MiFID simply reinforce the best practice policy which should be applied by an investment services provider. This legislation is in fact aligned with the existing HSBC Group policy of providing a high quality service to its clients.
MiFID incorporates provisions concerning the way in which:
MiFID requirements impact our clients in the following areas:
It is unlikely that you will see a lot of changes in the way you communicate and transact business with our Bank. Many of the requirements specified in MiFID are already incorporated in our existing Policies and Procedures that aim to provide a high standard of service to customers.
Under MiFID clients can be categorised in one of three categories:
Yes, you have the right to request a change in categorisation so as to enjoy a higher level of protection.
Yes, provided that you are in a position to meet certain criteria specified by MiFID in order to become a Professional client. It should be noted that such a change will result in the loss of the high level of protection provided by MiFID to Retail clients.
You must contact your account Relationship Manager who will provide you with all the necessary information. The Bank will examine your written request and will respond in writing advising you of its decision.
With the introduction of MiFID, we are required to provide our clients with Best Execution.
When you give us an instruction to buy or sell a financial instrument for you and we act upon the instruction, this is the execution of your order.
The Best Execution Policy and Procedures implemented by HSBC Bank plc include:
In the MiFID information pack which was mailed to you, we have included a summary of our Best Execution policy. Unless you notify us to the contrary we will assume that you have given us your implied consent to our Best Execution policy. No further action is required on your part.
MiFID requires that we inform you of our Conflicts of Interest policy and of any potential conflicts of interest that may arise during the provision of investment services.
It should be noted that HSBC Bank plc already had policies in place to identify and manage potential conflicts that may have arisen between:
In the material mailed to you we have included a summary of our Conflicts of Interest Policy. Alternatively you can contact your Relationship Manager who will be able to provide you with further information.
MiFID introduces the concept of assessing for suitability, and requires that we ensure that any investment advice provided to investors is suitable for them. In order to be able to assess for suitability, the Bank must be provided with specific information by the client(s) including, financial information, previous experience in investment products, risk tolerance and the client's investment objectives.
MiFID also introduces the concept of assessing the appropriateness of transactions in complex investment products.
For non-complex investment products, we are only obliged to assess for appropriateness when the client chooses to undertake the transaction after having been informed of the product at our initiative.
We are not required to assess the client's investment decision for appropriateness when the client is acting on his own initiative. However, when a client undertakes a transaction on his own initiative we are still obligated to inform the client of the loss of protection which results from acting on their own initiative.
Inducements are payments or non-monetary benefits which we receive or pay out as a result of advising on or arranging investments for clients. According to MiFID, we are required to disclose to our clients the basic information concerning any such payments or non-monetary benefits.