hm interesting. is this the problem? ->
The implications for introducing brokers (IBs) and affiliates relates to MIFID II requirements for ‘tied agents’. As such, the regulation’s definition of a tied agent is a firm that has responsibility to one MIFID conforming investment firm, for whom it acts on behalf as it promotes investment services, provides the service of either receiving and transmitting trading orders, placing financial instruments or providing investment advice.
Many of the limitations for IBs are written into this description for tied agents. A tied agent can’t provide investment services on behalf of more than one MIFID regulated investment firm.
Furthermore, if an IB or affiliate doesn’t want to fall under the scope of MIFID, than they can keep their role of introducing clients to investment firms, but they can no longer facilitate transactions and can’t be involved in the receiving and transmitting of orders.
But it gets even more tangled than this. Article 24(9) of MIFID II states that investment firms breach their responsibilities when they pay or are paid a fee or commission, or are provided with any non-monetary benefit, in connection to the provision of an investment service, from a third party who is not a client.
The only exception is where the third party enhances the quality of service to the client and does not impair the investment firm’s regulatory compliance to act honestly and fairly.
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Where that leaves affiliates and IBs is largely still unsure. All that is guaranteed is that there is a new inning to be played out, that many won’t be able to see through to the end. This will not be due to a lack of will, as much as resources and the ability to meet stringent demands.
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https://www.financemagnates.com/institutional-forex/bloggers/mifid-ii-implications-ibs-affiliates-fx-industry/
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