8. Regulation Meets Business: The Effects on the Investment Industry

The chapter discusses the expected impact of the Package on the financial industry. Also, this is done in a comparison to MiFID I. While the latter was widely welcomed as a modernizing novelty, nowadays both investors and the industry tend to worry about the ‘legislative flooding’ witnessed during the last decade, whose capacity to fulfil its goals deserves a thorough analysis. By looking at how product governance and intervention are going to be materially enforced, we debate some of the greatest concerns for the financial intermediaries affected by the Package: from the rise of additional compliance costs—mainly with regard to best execution and transparency requirements—to the consequences of wider disclosure to clients; from the change in distribution channels up to the duty of separating research-related revenues from different ones. In particular, we discuss these issues in connection with other seminal pieces of EU legislation in the fields of insurance and asset management, highlighting that several entities are likely to have their business model completely overhauled in the near future.