European Journal of Law Reform

Article

Get Your Money’s Worth from Investment Advice

Analysing the Clash over the Knowledge and Competence Requirements in the Markets in Financial Instruments Directive (MiFID II)

Keywords Better Regulation, ESMA, financial regulation, expertise, MiFID II
Authors Aneta Spendzharova, Elissaveta Radulova en Kate Surala
Author's information

307828 Aneta Spendzharova
Aneta Spendzharova is Assistant Professor in the Political Science department of Maastricht University, The Netherlands.

307831 Elissaveta Radulova
Elissaveta Radulova is Assistant Professor in the Political Science department of Maastricht University, The Netherlands.

307834 Kate Surala
Kate Surala is a graduate student in the MSc in Law and Finance, Pembroke College, University of Oxford, UK.
  • Abstract

      This special issue aims to examine whether there is an enduring politicization in the European Union (EU) “Better Regulation” agenda despite the emphasis on neutral evidence-based policy making. Our article addresses this overarching research question by focusing on the use of stakeholder consultations in the case of financial sector governance, particularly, the amended Markets in Financial Instruments Directive (MiFID II). We show that calibrating key provisions in MiFID II, such as those concerning knowledge and expertise, is not a simple exercise in rational problem definition and policy design. The provisions examined in this article have important repercussions for financial sector firms’ business strategies and operations. Thus, investment firms, banks, training institutes and public organizations have mobilized and actively sought to assert their views on the appropriate requirements for professional knowledge and experience in MiFID II. We found that, following the stakeholder consultation, the European Securities and Markets Authority (ESMA) opted for a minimum harmonization approach at the EU level. At the same time, ESMA also supported giving the respective national competent authorities sufficient remit to issue additional requirements in accordance with national laws and regulatory practices. Our article demonstrates that while public consultations provide rich evidence for the policy making process, they also contribute to the lasting politicization of regulatory decisions.

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