Will MiFID Ⅱ tame the investment services industry of the Baltic Tigers?

摘要

Purpose - The purpose of this paper is to assess the impact of the markets in financial instruments directive Ⅱ (MiFID Ⅱ) on investment services in the Baltic states. Design/methodology/approach - The authors take an exploratory, qualitative approach, based on data conducted from interviews with nine investment industry professionals using the laddering technique. The pool of experts was selected using the purposeful sampling method, and experts must have had a minimum of five years investment experience in the Baltics, working familiarity with MiFID Ⅱ, and a university education in the fields of finance or economics. Findings - The strict requirements of MiFID Ⅱ reduce the range of available investment products and services for customers in the Baltics. Also, the profitability of Baltic investment companies decreased due to high compliance costs and bans on inducements. The results indicate that this may lead to increased barriers to entry and mergers and acquisitions for small investment companies. Originality/value - To the best of the authors' knowledge, this is the first attempt to research the implications of MiFID Ⅱ implementation in the Baltic states. The qualitative approach chosen offers a unique opportunity to highlight the critical effects of MiFID Ⅱ on financial intermediates in smaller geographical markets.