Both, industry and investors, have clearly expressed their dissatisfaction with several measures that have been implemented in 2018 in order to comply with the new requirements under MiFID II. ESBG has several times asked to use the upcoming review of MiFID II to adjust the current requirements.

Against this background, ESBG welcomes the Commission’s proposals for a MiFID “quick fix” providing quick solutions for some of the major problems that are inter alia:

  • Proposal for an exemption for eligible counterparties and professional clients with regard to costs and charges disclosure – the exemption should also cover the disclosure of inducements since they are regularly disclosed in the cost information.
  • Exemption for the product governance requirements for corporate bonds with make whole clause – the exemption seems too narrow and should be widened.
  • Introducing electronic format as the new standard for the provision of information (replacing paper-based information which is rather antiquated).

Despite the proposal of the quick fix, which is very much appreciated, there are other important issues that should be addressed in the regular review that should follow the quick fix:​

  • EBSG would be in favour of including a further category, between professional investors and retail investors, for people who are not professionals, but trade very frequently within a certain reference period.​
    ​We would recommend reviewing the requirement to record all telephone conversations, taking into account the fact that ESBG members have learned that their clients do not like that their conversations are being recorded and the recordings stored.
  • The review should be used to remove existing differences between the provision of information on costs of financial products according to PRIIPs and MiFID II. E.g., both legal bases use the wording ‘total cost’, but they provide different results on the same financial instrument, as the total costs according to PRIIPs just refer to product costs and the total costs according to MiFID II refer to service costs and product costs. To avoid further confusion amongst clients, we strongly suggest using different wordings in the context of PRIIPs and in the context of MiFID. A possible solution to the problem of reconciling the PRIIPs Regulation and the Delegated Regulation with MiFID II would be to dispense with the presentation of costs in the KID if the product in question was a financial instrument within the meaning of MIFID II. This would avoid giving clients contradictory information while nevertheless informing them about the costs in accordance with the requirements of MiFID II.
  • Clarification that the ex-ante cost information can in certain cases (products with no product costs or sale orders) be done in a standardised format via a cost grid so that investors do not have to receive redundant cost information.

Identified Concerns

ESBG identified several issues in the implementation of MiFID II:

A tremendous client dissatisfaction with the flood of information. Data shows many investors are of the opinion that they do not need all the information foreseen under MiFID II. They feel overwhelmed about all the paperwork for (often simple) investment products. Regulators should therefore take into consideration a further client category, between professional investors and retail investors (and understood as sub-category of retail as argued below), in order to differentiate sophisticated retail clients (who trade frequently and usually undertake a great number of investments, and who may not need the full set of information every time they become active) and less sophisticated retail clients (who do just few investments in a lifetime and who should always be provided with the full set of information).

Telephone conversation: option to waive voice recording. Many clients complain about the obligation to record telephone conversations. If the client contacts the institution by phone, the parts of the conversation that are relevant for securities must be recorded, and the voice files have to be stored for between five and seven years (for investment advice and advice-free orders). Clients feel patronised and feel that the relationship of trust with their advisors has been impaired.

Costs: Harmonisation of legislation such as MiFID II and the PRIIPs Regulation. The largest problems for clients is, that they are provided with differing product costs for the same product (if it is both a PRIIP and a financial instrument under MiFID II), even if the information in both cases is based on the same investment amount of €10,000. This discrepancy, which has to be explained to clients and is difficult for them to understand, is a result of contradictory calculation requirements in EU legislation.

Information requirements in the wholesale business. Professional clients and eligible counterparties are familiar with the way capital markets function. They have significantly more knowledge and experience than retail clients. Both their need for information and their need for protection are significantly lower than those of retail investors. These client groups frequently include banks and institutional investors (which are usually classified as eligible counterparties, though sometimes as professional clients), which meet the investment firm on an equal footing. In many cases these market participants are not only familiar with the market conditions and prices of the various providers but specify the conditions of the transaction in question themselves.

Why Policymakers Should Act

ESBG welcomes the background to the introduction of MiFID II, e.g. increased transparency and investor protection. However, savings and retail banks experienced that many clients did not welcome the changes that MiFID II introduced and complained about the amount of often unhelpful (and overlapping) transaction-based information they have to go through, in particular ex-ante and ex-post costs disclosures. The administrative burden and the additional steps do not improve the investment experience. Many clients feel ‘misunderstood’ and wish for ‘opt out’ options. They feel overwhelmed by the sheer amount of information and would rather have the possibility to waive parts of it. Many investors want to decide for themselves if they wish to do without certain information (such as constantly repetitive information on costs) or receive information afterwards (following telephone orders, for instance). ESBG urges policy-makers to streamline the respective provisions in the imminent review process and welcomes the proposals by the Commission for a MIFID quick fix. Nevertheless, other issues need to be addressed in the course of the review.


MiFID II (and MiFIR) started to apply in January 2018, with aim of bringing significant improvements to the functioning and transparency of EU financial markets. To assess the overall functioning of the regime after two years of application, MiFID II/MiFIR require that the Commission presents the Parliament and Council with a report on the operation of the new framework, together with a legislative proposal for reform on areas that would merit targeted adjustments. A review proposal for a “MiFID quick fix” by the Commission was published on 24 July 2020. The proposal targets “short-term” amendments to MiFID II (such as exemptions for eligible counterparties and professional clients with regard to costs and charges disclosure and the phase-out of the paper-based default method for communication in favour of electronic format). ​