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What Does MiFID II Mean For The Financial Services Sector?

On January 3, 2018, the EU (European Union) updated its Markets in Financial Instrument Directive (MiFID) to MiFID II. MiFID aims at making the financial markets in Europe more transparent, resilient, and investor-friendly. It’s ideally an attempt by the EU to set up a single rulebook that covers the financial market activities and services while replacing the decade-old MiFID I.

Financial firms are required to deal with approximately 11 areas of change, from reporting transparency to archiving communications and demonstrating best execution, along with the unbundling of research, surveillance, and the trading mandate for derivatives. Since most firms in the financial services industry typically do business with the EU, it’s vital to adhere to the set requirements to ensure that business with their EU clients is not disrupted when the MiFID II is implemented.

Specific Changes from MiFID II

The new legislation affects a number of sections in the financial industry, including broking, dealing, and the various advisory services provided by banks, non-banks, among other financial service providers. As such, all financial services and investment firms will have to comply with the new MiFID II rules. Under the new legislation, firms that offer financial advice of any kind to clients over calls must record these calls, and the face-to-face meetings formalized with taking minutes so that all transactions are recorded.

Impact on Investment Decisions

The new MiFID II legislation also stipulates how asset managers should pay for the research they conduct when making investment decisions. Previously, asset managers could receive research, including documents like written reports or phone calls free of charge. The cost of the service was accounted for in the trading fees, which would normally be paid for by the clients of the manager.

When the MiFID II comes into effect, fund managers will be required to budget for trading costs and research separately. The technical term for this is “unbundling”. For the longer term, institutional investors will have further evidence to prove to their brokers that they are working to the best of their abilities.

Impact on Capital Markets

The MiFID II regulations are strongly aimed at empowering good conduct of business, though the capital markets have come across as an unintended target as well. The MiFID II stipulates that the firms should meet a quality enhancement test, which means that the client is benefiting from your services. The term “client” here can refer to both the investor clients and the issuer.

This raises a few eyebrows, considering that for the capital markets, it could mean the usual daily activities like making the reciprocity agreements in the course of book-running processes. Such an activity is vital in most businesses, implying that some modifications to these agreements might affect the firm’s abilities to trade successfully.

Clampdown on “Dark Pools”

“Dark pools” refer to the private markets that allow the dealers to buy and sell large shares blocks without having to reveal the price paid or order size beforehand. Many traders favor dark pools since whenever a big order is traded on the public stock exchange, those who use algorithms for spotting large block orders and high-frequency traders would probably trade against the orders. One challenge with this is that the stock exchanges are certain that dark pools rob them of business in lost fees and higher prices. MiFID II counteracts this issue by requiring not more than 8% of any stock volume traded this way.

Enhanced Monitoring and Reporting

The new MiFID II legislation requires the financial services community to enhance their reporting and monitoring, to make it easier for the regulator to spot risk, and reconstruct the events whenever necessary. For example, brokers have to record all conversations that relate to a deal and store them for 5 years, bond traders must tell the market of all the deals they have transacted in the first 15 minutes of them taking place, institutions have to report key details about a trade like volumes and price almost instantly, and all trades have to be time-stamped.

The MiFID II essentially integrates the G20 leaders’ commitment to move the trading of derivatives to electronic platforms with more rigorous requirements for investor protection and market probity. Although the EU regulators don’t have a direct impact on the financial firms outside the EU, global financial markets are structured in a way that the new legislation will exert indirect pressure on the non-EU firms, including the U.S. Asset Managers.

It’s quite clear that the revised MiFID II will have a significant impact on the financial services industry, even if the implementation is slow initially. And whatever happens, MiFID II will go down in the financial diary as a landmark legislation and the start of a new chapter for the rules and regulations in the financial sector.

The Technology That Underlies Digital Currencies – What Should You Know?

If you were to look at the most talked about topics on the internet today, digital currencies would be at the top of the list, if not right at the top. Why? Because it is literally changing the way, people are spending money online. In fact, cryptocurrencies can’t be regulated (yet), and every time a new one comes along, it makes it even harder for governments to keep tabs on them. At the moment, Bitcoin is the one with the most value, and people are stumbling over each other to get their hands on them. This is because Bitcoin has become an investment that keeps on growing at an amazing rate. But it’s definitely not the only one, and the competition for better digital currencies keeps on coming.


But what should you know about the technology that underlies digital currencies? What makes them so unique and why should you be informed about it in the first place before investing, if that is your ultimate goal?


Well, it does get a little complicated, but here is a basic breakdown of how it works.

The Mathematical Twist


The first thing you have to know is that digital currencies like Bitcoin are created via highly-complex mathematical equations. And these equations require powerful computers and time to solve and create. This process is called “mining”, and people all around the world are using their computers to mine Bitcoins for them.


However, there is a major twist you need to face if Bitcoin is the one you are focused on. The creator implemented two specific limitations when he came up with the digital currency. The first is that only a certain amount of Bitcoins can be created, and the second is that only a certain amount can be generated at a single time.


Now, the more people who mine for Bitcoins, the more difficult and overcrowded it gets. As you are reading this, it takes about four years to mine one Bitcoin. So, unless you started mining when Bitcoin was still unknown, you have to be realistic about how much you can make.

Moving forward with the technology that makes up digital currencies, Bitcoin comes with what is called the blockchain. The blockchain records all the transactions that are made, so you can see it as a big virtual ledger that keeps track of everything. However, the blockchain doesn’t allow for the transactions to be traced back to the people who made them.


You see, everything gets encrypted, and every Bitcoin trader has a private and a public key. When you buy something with Bitcoin, your private key is used for the transaction, while the person you buy something from uses their public key. Once the operation is finished, everything gets encrypted again, and your Bitcoin switches ownership. This also means the Bitcoin can’t be traced back to you after spending it.


Unfortunately, Bitcoin has one or two flaws the governments are trying to exploit to gain some control. And whether governments are going to be successful in exploiting these flaws remain to be seen. Luckily, there are several other digital currencies making waves, and they aim to avoid the same pitfalls.


Regardless of how popular digital currencies are and their growth in value, you should always be careful before making any investments. Just like the stock market, the value of Bitcoin, or any other digital currency for that matter, is vulnerable and can drop at any moment. It remains an unpredictable space you want to understand better before taking any risks.


Bitcoin Explained

invest in bitcoin

Investing In Bitcoin

Bitcoin is a digital currency created and held electronically. It was created in 2009 and became the first decentralized digital currency. Its creation is attributed to an unknown software developer or developers going by the name Satoshi Nakamoto. Bitcoin operates on blockchain technology that acts as a public ledger that holds permanent records of all transactions.


invest in bitcoin

How to Use Bitcoin

Bitcoin is used for making electronic purchases just like Dollars, Pounds, or Euros but only a handful of merchants accept payments in bitcoin. Accessing bitcoin is another potential hurdle since the process is not very consumer friendly. Traditionally, you had to go to a cryptocurrency exchange to buy bitcoin and transfer it to your bitcoin wallet but things are now changing. Today, new services such as bitcoin debit cards and ATMs are now available to ease the process.

Investing in Bitcoin

It can be a good idea to invest in bitcoin since it presents so many benefits. Bitcoin has been outperforming traditional stocks and is currently worth more than an ounce of gold at the time of this writing. Here are a few more reasons why you should consider investing in bitcoin:


Today, people have an unprecedented level of distrust in the current financial setup. In the wake of the 2008/2009 global recession, the resentment towards banking institutions by both private and public institutions is growing. People are thus warming up to the idea of using different mediums of exchange such as bitcoin.

Deflationary Model

The bitcoins that can ever be mined are limited, which means that the problems of inflation associated with traditional currencies don’t affect bitcoin. In theory, the price of a bitcoin would grow infinitely in a completely free market where each coin would potentially be worth hundreds of millions of dollars. However, this would involve a significant acceptance of the currency globally as well as other factors coming into play, but on paper the value of each coin should rise as trade continues to rise.

How Can You Invest in Bitcoin?

Buy and Hold

One of the easiest ways to invest in bitcoin is to buy some and wait for their value to rise. This approach has already made a sizeable number of people quite wealthy. The people that bought Bitcoin early on have enjoyed significant increases on their investments. Originally, Bitcoin sold for a few dollars and now it is worth about $3,000 at the time of this writing.

Mining Investment

Transactions on the blockchain are verified by a distributed network of powerful computers. If you contribute your computing power to this distributed network, some of the freshly minted coins will be apportioned to you as an incentive and reward for transaction processing. The network adjusts as more computing power is added to it which means that a constant number of bitcoins are generated relative to the increase in computing power. The process described here is known as mining and is one of the ways you can invest in bitcoin.

Investing in Companies

If you prefer the traditional approach to investment you can invest in one of the many emerging bitcoin startups. Bitcoin creates new approaches to online transactions and increases the efficiency of old models, which usually brings profit. If you invest in a company innovating in this industry, you will benefit from the technology without the need to speculate on the commodity (bitcoin).

The Bottom Line

Bitcoin is an excellent investment vehicle even for those that are risk averse. The important thing is to invest in only what you can afford to lose since it is highly volatile. You should also educate yourself about the risks, advantages, and disadvantages of using different bitcoin storage methods.


Investment – Undertakings For The Collective Investment Of Transferable Securities

Modern investors remain steadfast with their research while aiming to find hidden gems.

It’s a hard task at the best of times, but there is one option which pops up again and again. It comes in the form of UCITS.

Here is more on why these funds are deemed as being intriguing investment options for investors.

Why is UCITS an Interesting Investment?

The UCITS funds were set up as a guideline for the European Commission. These funds would be produced and managed in Europe while being dispersed to investors on the open market. These funds wouldn’t be limited to European investors, but instead, would be made available to everyone across the planet.

The premise of doing this was to ensure a harmonious relationship could be maintained between European nations when it pertains to mutual funds.

The UCITS funds are set up to provide singular protection rights and are regulated in a streamlined fashion.

Benefits of UCITS

Here are some of the reasons UCITS continue to be useful investment options for investors.

1) Highly Regulated Funds

The primary reason investors are drawn towards these funds has to do with the regulations. These funds are governed far more than other investment vehicles. This ensures the laws are followed to a tee, and all service providers remain steadfast with their support.

This regulation is what ensures the funds stay in sync with the market.

2) Favorable Tax Treatment

Taxation experts illustrate these funds as being tax-friendly due to the regulatory treatment in the EU. With the taxation laws as they are, these UCITS funds can maximize one’s returns in comparison to some of the other investment options one might have.

3) Bi-Monthly Liquidity

The next benefit of UCITS comes in the form of liquidity. Many investment vehicles are not as liquid as one would want them to be. However, UCITS funds can be turned into cash/profit within two weeks as there is a bi-weekly requirement by law.

This provides investors with a “way out” if necessary.

4) Ideal for Small Investors

Small investors have reduced budgets and will not wish to take on unnecessary risk.

With UCITS funds, the small investor can even the playing field and get involved in creating a robust portfolio of their own. This can make all the difference for solidifying these funds and ensuring they remain steady at all times of the year. It also ensures small investors can join in.


Several UCITS funds are being offered on the market right now.

Over 75% of the investment market is featuring UCITS funds because they’re heavily regulated and remain under control. Investors desire security and these funds can offer it.

1) Diversified Equity Alpha Portfolio
2) Emerging Markets Growth Portfolio
3) European Value Portfolio
4) Real Asset Portfolio

These are the top-tier portfolios for investors looking to dive into the world of UCITS once and for all.

These are deemed as being high-grade, long-term options for those who are selective and wish for quality results moving forward. It’s a great starting point for those establishing their portfolio.


Interested in European Markets – read more about 5 Reasons To Invest In European Stocks.

Why Facebook Inc (FB) Is A Great Long-Term Investment Stock

The stock market is a terribly confusing place, and deciding where to go can be a perilous experiment especially for a beginner investor. Nonetheless, within the labyrinth, a few stocks pop up that hold a solid chance of being a forever investment, and are reliable through good and bad times. Facebook Inc. (FB) is a top contender under this respect.

facebook stock

In fact, difficult not to paint the stock in good light. In 2016, its shares were up 14 percent, which is approximately double the S&P 500 index 7 percent return in the same year. Since initial IPO in 2012, the Facebook stock has risen 213 percent, tripling the 69 percent return of the S&P 500.

Today, Facebook still manages to report stellar growth almost every quarter, owing to its dominance in social media usage, and ad spending. Facebook can continue to maintain the phenomenal run, and even gain more momentum in the future; here is why.

Facebook – Constant Innovation

Many investors have been expecting what would seemingly be the eventual slowdown of the social media giant’s growth, but they were recently disappointed. In its third quarter, after putting video first, the company has reported a 59 percent improvement in ad sales revenue. This accounted for $6.8 billion out of the total $7 billion in revenue.

Brilliant Founder

With an innovative and brilliant founder Mark Zuckerberg, and his proven track record, investors can rest assured that Facebook is in good hands as he knows where he wants to get his company. Keep in mind that such brilliant founders have tended to work exceptionally well for shareholders. For instance, companies such as (AMZN), Alphabet (GOOGL, GOOG), Netflix (NFLX), and Tesla Motors (TSLA) have had brilliant and innovative founders and excellent results.

Mobile Mastery

In this quarter of 2016, over 85% of all its ad revenue was from mobile, which is an improvement from 78% in the year before. As more consumers transition over to mobile platforms from their personal computers, the FB stock is ideally positioned.

Powerful Edge

Facebook essentially has a great 1.8 billion monthly active users, and the number is still growing. Many users find Facebook very addictive. According to experts, internet users spend more time on social media platforms than on any other digital activities. As such, Facebook is a very important global business channel. Every new person who joins the network adds more to its value, making more people want to join. This is the network effect where a service becomes much more valuable when more people use it.

Monetization Potential

Facebook now owns Instagram its only rival, and Whatsapp Messenger. Instagram has over 500 million active monthly users, though it still doesn’t contribute much to the breakneck pace of growth of Facebook. However, the platform is now increasing the number of ads, and its contribution should see more growth.

Besides Instagram, company owns Facebook Messenger, and WhatsApp Messenger, two massive messaging platforms. However, Facebook still hasn’t realized the monetization potential of these two and is strategically placed to dominate in the future.

5 Reasons To Invest In European Stocks

European stocks have too often been overlooked recently as a great investment option, especially when looking for an option that offers the potential for high returns while still providing a degree of diversity for safety compared to being fully invested in American markets. Read on for five reasons to be bullish on European stocks right now.

european stocks market

#1: European Markets Are Doing Great

Everyone is paying attention to the long winning streak of American markets that has been going on for several years now, however European markets have bounced back, as well. In fact, many of the European markets in the last 4-5 months have even managed to outperform their American counterparts. The market is strengthening and now is a good time to get in on that strong growth.

#2: Sometimes Regulation Is a Good Thing

European markets are known for generally being more regulated than many markets in other nations. While this can sometimes be seen as a disadvantage because it limits breakout potential, post-2008, and post-Brexit, the idea of having corporations proven in a system that is tighter and less likely to be shaken by a major economic catastrophe.

That degree of safety or perceived safety of the companies putting out stock can be seen as an investment positive in today’s markets and is often seen as a plus since there’s a degree of built-in shock resistance.

#3: Weathered the Brexit Shockwaves

While all kinds of “Woe is the world” headlines have been in the papers and news about the effects of Brexit and the initial hits to the markets, many people have ignored the fact that the markets have done just fine since then. Whether looking at Germany, France, or Britain, three of the largest markets in Europe, all of them have increased by double digits in value since riding out the initial Brexit shockwaves.

In other words, even with a major shocking event such as Brexit, the European markets have already absorbed that shock and are doing just fine.



#4: A Weaker Euro Means Opportunity

The Euro remains relatively weak as a currency and this gives additional opportunity. Buying European stocks while the currency is relatively weak means you will gain value, possibly significant gains in profits and value when the Euro turns around and strengthens once again. This is one of those stock buying opportunities that won’t be around forever. A stronger Euro will be great for investors who already bought in and be a new wall for those who waited too long.

#5: European Stocks Earnings Are Looking Great

One of the things that held back European stocks a bit in recent times has been lower earnings reports. However, the bottom of that slump is clearly behind them, and the earnings and returns reports are beating predictions in addition to showing a strong bull market strength that doesn’t typically appear during a short term or false recovery. When looking at the new earnings numbers, it’s hard not to get excited at where the markets are going.

There’s no denying it. European stock markets are offering quite the opportunity to those who are wise enough to take advantage.



French election 2017

Will Macron, Le Pen, Fillon, Le Pen, Mélanchon or Hamon win in the first round of the French election?


First Round Poll – French Election

The first round of voting is shaping up to be one of the most unpredictable in history.

Latest poll from Ipsos France putts the top four candidates within just four points of each other:

#Macron 23%, -2
#LePen 22,5%, -2,5
#Fillon 19,5%, +2
#Mélenchon 19%, +4
#Hamon 8%, -2

Emmanuel Macron leads the poll with 23 %. Marine Le Pen, who has vowed to freeze immigration and end the Schengen agreement, is just behind with 22.5%.

Francois Fillon is just behind with 19.5%, with far-left firebrand Jean-Luc Mélenchon on 19%.


French Election

About The Premiossm

The Premiosssm is about investment, economics, financial markets, politics, culture, and media.

I know that investing is not easy. My goal is to make it easy.
I review, analyze and compare strategies, funds, financial institutions. I will share my thoughts, and recommendations with regard to pretty much anything financially-related. I will point you toward other interesting websites.

Remember, I never intend to tell anyone in what to invest nor give any financial advice.

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Mike Primegeld