The National Assembly adopted a law that tightens investor protection regulations. Under the new law, financial services providers are obliged to inform customers who are about to make an investment in more detail about potential risks.

The development of financial markets and increasingly complex investment products had necessitated the adoption of an updated regulatory system capable of facing up to new challenges. Through the new regulation, the transposition of the EU’s MiFID II (Markets in financial instruments directive) into domestic law has also been completed. The Directive is aimed primarily at tightening regulations on investment services and the trade of financial instruments.

The current amendments partly tighten certain currently effective rules, for example those on investment consultation services and portfolio management, and they increase the number of requirements with regard to customer information. New rules will apply to independent consultations, and agent incentives will also be more closely scrutinized before approval.

The new regulations will also refer to certain elements of investment services, as well as the organizational and business requirements concerning investment consultancies and exchanges. Certain regulations on the operation of the management boards of investment services providers have also been made stricter. The range of financial instruments will be widened to include trade in greenhouse gas emission units, for which the regulations on investment services will also serve as guidelines.

As far as trade is concerned, it is a main priority that transactions be conducted in a regulated manner at properly supervised exchanges and thus a level playing field be created.  To this end, the law will enable – as a new element -- the founding of exchanges that specialize in the trade of SMEs, and thus promote their expansion.

(Ministry for National Economy)