Questions and answers about MiFID

What is MiFID and what are its effects? 

Regulations governing investment services are being revised throughout Europe. MiFID II is a new version of the Markets in Financial Instruments Directive and it will enter into force on 3 January 2018. 

Its aim is to increase transparency in the financial markets and make it easier to compare investment services, benefitting investors and the entire financial sector. Investors will get more information than before to support them in their investment decisions. The new directive will also specify in more detail which customer groups various investment products may be sold to. 

Tangible benefits

  • Investment products will be easier to compare to one another.
  • More investment alternatives will become available.
  • The competence requirements for investment advisers will become stricter.
  • The level of competence will become more consistent throughout the sector. 

In addition, we will ask customers more specific questions so as to map out their individual circumstances.

Where will I notice the effects of the new MiFID II regulations?

You will receive more detailed information about saving and investment alternatives and their costs. 

When giving you investment advice, we will ask more questions in order to gain more detailed information about your financial situation and to ensure that the investment products we are offering are suitable for you. 

We will provide more information about costs and how they arise, as well as what additional services you will gain. 

Our product selection will be expanded to include funds provided by other large international fund management companies. These will allow you to invest broadly in different alternatives and in asset classes in which Nordea does not have its own products. Moreover, we are bringing more passive investment alternatives of our own to the market.

I have received a message about a customer notice in my Mobile Bank. Why don’t the links in the message work? 

If you are using Mobile Bank on an iPhone, the link does not work because of an unfortunate error. We will fix this in our next Mobile Bank update. Until then, you will be able to read the notice in Netbank under Contact us > Messages > Inbox.

I received a letter about amendments to terms and conditions. Do I need to do anything? 

You do not need to do anything, as the amendments will enter into force automatically. 

Why did I receive a letter from Nordea about amendments to terms and conditions even though I’m not a Nordea customer?  

The letter was sent to all customers to whom the new investment services regulations apply. You may still have a valid investment services agreement with Nordea even though your customer relationship with us has ended. The investment services agreement is concluded when you buy investment services and it defines your rights as a customer and what Nordea will do in different situations.

What is an LEI? 

Companies, corporations and foundations will need a Legal Entity Identifier (LEI) in order to trade in publicly listed securities. You can obtain an LEI by applying for one from the Finnish Patent and Registration Office. You cannot trade in securities without an LEI, which is needed for trades in derivatives as of 1 November 2017 and trades in listed shares and bonds and exchange-traded funds (ETFs) as of 3 January 2018.

Private individuals do not need an LEI.

Read more about the LEI

Why does Nordea record all conversations? 

Regulations require banks to record all telephone conversations concerning investment advice. It is in your best interest, as recorded conversations can afterwards be used to verify what was said and how the investment advice has been realised.

Why does Nordea ask for information about my financial situation? 

Nordea will ask more questions than before in order to find out about your individual circumstances. We need this information in order to give you the most suitable investment recommendations and to find the appropriate investment products. 

MiFID II requires a more in-depth review of an investor’s background and needs than before.

Why am I asked about my nationality when trading on stock exchanges?

Private individuals may use only one personal identifier for stock exchange trading in the EU. For Finnish citizens, it is their personal identity number, and therefore they do not need to do anything. However, citizens of other EU countries and dual citizens must in certain situations provide their bank with a personal identifier from their home country or their second country of citizenship. 

What does the transparency of investment costs mean? 

It means that it will be easier to assess the costs of investment products and to compare the costs charged by Nordea with those of its competitors.

In future, we will give you more details about what makes up the costs of an investment product. We will present the costs transparently as a percentage of the invested amount and in euros. We will also provide information on our incentives, or the fees that we receive from our fund management company and our other partners.

We will send you a quarterly report on your assets and an annual report on the costs you have paid.

Why does Nordea offer funds managed by other companies than Nordea Funds? 

We want to provide our customers with a diverse range of different investment alternatives. The funds provided by other large international fund management companies which Nordea offers will allow you to invest broadly in different alternatives and in asset classes which Nordea does not have in its own funds.

How will Nordea benefit from MiFID II?

MIFiD II is a positive development for the entire financial sector. It will make the level of competence in investment advice more consistent, improving its quality. The requirements of MiFID II, however, are not set by banks but by the regulators overseeing the sector.