The objectives of implementing the MiFID provisions include
Close cooperation between the investor and the bank
MiFID ensures that financial services companies provide investors with adequate advice with regard to treasury and securities transactions so that investors are able to assess the implications and consequences of intended transactions. This requires a broadly-based exchange of information between investor and adviser. A relationship manager is in a position to offer sound advice only if he or she is able to make an informed assessment of key aspects such as the investor’s risk appetite, financial situation, investment goal and experience in financial markets on the basis of information obtained from the customer.
If an investor refuses to furnish the information required by law, the law does not permit the provision of investment advice and a personal recommendation of investment products or the conclusion of an investment management agreement with this investor.
These data must be collected in order to draw up a comprehensive investor profile, which is mandatory for banks under MiFID. Providing this information is in the sole interest of the investor. Banks are, of course, subject to the bank secrecy rules in respect of information obtained in this process, and for this reason such information enjoys special protection.
The core elements of MiFID can be summarized as follows: