MiFID: A business level approach

Kristian Sakkestad

Student thesis: Master thesis


MiFID is a topic which has proven significant for the financial industry. In this paper I have tried to determine how MiFID has affected divisions of the banking industry in Norway. By looking at Sparebank 1 SRā€Bank which is a large bank based on assets, and a part of the 3rd largest banking alliance in Norway. This makes them a good candidate as a case example as they are both an individual bank, and a part of a larger alliance. The issues covered in this paper includes a brief description of which financial products are available to investors in Norway while emphasizing what effects MiFID brings. Hereunder the effects of currency as an investment product and the issues of MiFID as not all currency investment products are subject to MiFID. Further I have looked at the consequences of MiFID in relation to the financial crisis, what aspects of MiFID have been strengthened or weakened by the crisis. This I have tied together with what effects MiFID has had on issues surrounding investment advisory and fee structure. MiFID has not only brought negative issues along being that it is a mandatory piece of legislation, it has also brought along strategic issues and new business opportunities and openings for companies. It has been a platform for reviewing and adapting in what direction they wish to continue developing their business. Before concluding my finds, I have looked at issues that are critiqued as a part of MiFID. The most important issue is that of the home state advantage where the playing field is not level for all even though that is a significant goal of MiFID. I have found that in order to gain positive effects from MiFID as a tool it is important to keep in mind that it needs to be used as a dynamic tool. It is not enough to make the customer fill out a form to become an approved customer. It is a challenge to on a periodic basis update the customer input and inform the customer of the consequences of his profile. If applied statically it will be viewed upon as an administrative burden which does not add value.

EducationsMSc in Finance and Strategic Management, (Graduate Programme) Final Thesis
Publication date2009
Number of pages79