MiFID implementation process in the Slovak Republic expected changes to regulatory and supervisory a

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• MiFID implementation process in the Slovak
  Republic expected changes to regulatory and
  supervisory approach
• National Bank of Slovakia

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I.Transposition process

• Primary transposition deadline of Directive
  2004/39/EC MiFID moved from 30 April 2006 to
  31 January 2007. entering into force on 1
  November 2007
• MF SR and NBS cooperation in a process of
  implementation
• The implementation method used in SR new
  amendments of The Act No. 566/2001 Coll. on
  Securities and Investment Services, The Act No.
  429/2002 Coll. on Stock Exchange and other
  related acts

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• In a process of MiFID implementation The
  Directive 2006/73/EC implementing MiFID as
  regards to organisational requirements and
  operating conditions for investment firms and
  defined terms for the purposes of that Directive
  has also been taken into account.
• Implementation of some articles of the Directive
  in suggested amendments of The Act has been
  left within the NBS legislative competence as a
  measure of NBS

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• Simultaneously, Regulation 2006/1287/EC
  implementing MiFID as regards to recordkeeping
  obligations for investment firms, transaction
  reporting, market transparency, admission of
  financial instruments to trading, and defined
  terms for the purposes of that Directive, has
  been taken into consideration.
• Both implementing measures were published on 2
  September 2006

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II.The supervision performance by NBS in context
of MiFID implemnetation

• New terminology and consequent changes of
  particular articles of The Act
• - financial instruments and formulation of
  their content
• - investment services and investment
  activities

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• Categorisation of the clients
• - professional clients
• - retail clients
• - eligible counterparties
• Positive
• - unification of legal terminology
• - more transparency in transactions within
  all types of clients

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• Negative
• - frequent legal changes dont offer space
  for creation of sufficient legal basis
• -time requirements for capital market to adopt to
  a new legal conditions
• - Task of NBS
• - education of capital market subjects

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• Within the scope of optional implementation
• New institute of Tied agent
• Positive
• - possibilty of notification
• - capital market cooperation progress within
  the European economic area
• Negative
• - with regard to suggested scope of
  activities relatively low level of professional
  qualification requirements (e.g. absence of
  qualification exam)

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• Incomplete problem solution of financial market
  brokers in SR
• Task of NBS
• - participation in universal codification of
  all types of financial services brokers within
  the scope of one act of a law
• (august 2006 governament statement of policy
• legal systemization of financial services
  brokers)

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• Possibility of Omnibus accounts creation
• Positive
• - cost reduction
• - market access extension for retail clients
• Negative
• - investment guarantee risk for clients

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• New requirements on organisation and management
  of investment firms
• - beside internal control also new institute of
  compliance officer has been introduced
• - internal audit
• - risk management
• - possibility of more precise competences and
  responsibilities assignment of an investment
  firm management

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• Positive
• - more transparency in trading for clients
• - more effective prevention of wrong doing on
  capital market
• Negative
• - increase in administrative requirements in
  reporting obligations
• - increased operational costs
• - increased requirements on organisational
  structure
• Task of NBS
• - importance of guideline activities of NBS

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• Collective Investment
• the same requieremnt for management companies
  (which provide also non-core investment services
  under conditions definied in UCITS), as for
  investment firms
• Positive
• - equal handling
• Negative
• - questions of efficiency in providing of
  non-core investment services

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• Task for NBS
• - application problems and conformity problems
  of UCITS and MiFID (Level 3) directives

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• Influence on markets
• establishment of non-regulated market
  Multilateral trading facility (MTF), organised by
  stock exchange or investment firms
• Positive
• - flexibility in securities acceptance on a
  market
• (without need of any special conditions)
• - trading possibility for natural persons
• - trading in both, materialized and
  dematerialized securities

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• Negative
• - need of evidence of connection between the
  Central Depository and persons organising a
  market
• - possible influence on a capacity of a
  regulated market operations
• Task of NBS
• - MTF rules approval within a competence of NBS
• - increased level of investment firms
  supervision

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• NBS and supervisory authorities cooperation in
  european area
• - supervision cooperation according to
  implemented articles of MiFID
• - cooperation within the frame of CESR
• NBS participation in activities of MiFID Level
  3 working group MiFid tasks in the field of
  international cooperation of supervisory
  authorities

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• Thank you for your attention
• NBS