On January 3rd, 2018, a new piece of EU legislation comes into effect which changes the way investment services companies, including Nutmeg, will need to operate
One of the aims of the Markets in Financial Instruments Directive (MiFID II) is to introduce transparency and competition in financial markets across the European Union.
As part of this, we are required to carry out what is known as transactional reporting. One requirement is the new obligation for us to collect a national identifier to identify you as the customer on whose behalf we’re making a trade.
What’s a national identifier?
The regulation states that we need to personally identify our customers based on their nationality. The requirements for how we must do this differ by nationality.
For example, if you are a Belgian national we’ll ask you for your Numero de registre national / Rijksregisternummer. If you have Norwegian nationality, we’ll ask you for your 11 digit Personal ID / Foedselsnummer.
For some countries, such as Slovakia, a second ID number is acceptable if you’re unable to find the first. So for example, we’d ask you first for your Personal number / Rodné číslo, but we can also accept your passport number as an alternative.
For the majority of EU countries, we’re able to provide a combination of other personal details if you cannot provide the first or second preference identifiers for your nationality.
If you are a national of Estonia, Spain, Iceland, Italy, Malta or Poland, we will be unable to use other personal details for identification purposes. It’s therefore important that you provide the requested identifier as soon as possible.
What happens if I can’t provide this information?
We’re required by law to collect this information, so it’s important that you provide it as soon as possible when prompted to do so after logging into your account.
If you don’t provide this information by 8th December, 2017, we may need to apply restrictions to your account, which may include restricting your ability to invest, withdraw and move funds. But we’ll give you plenty of notice before this happens.
I’m not an EU national – why do I have to provide my passport number?
As a company operating within the European Union jurisdiction, we are obligated to identify all of our customers to EU regulators when trading on their behalf, including non-EU nationals. The EU has stated that in this instance passport numbers should be used.
How will my data be used?
Your nationality and national identifier will only be shared by us with the Financial Conduct Authority, and will be submitted whenever we make a trade directly on your behalf. We understand that the FCA may share this data with other ‘National Competent Authorities’, usually the Financial Regulators of other EU jurisdictions, in order to monitor the market for orderly conduct.
How does Brexit affect MiFID II?
At this stage, it is impossible to tell what the regulatory landscape will look like after the UK leaves the European Union, however many industry commentators believe that the majority of shared regulation, including MiFID II, will continue to apply beyond this point. In any case, as long as the UK is a member of the European Union, as it is currently, we are required to comply with EU regulation.
How safe is my personal data?
Your nationality and any associated identification numbers will be treated as private data and will only be used for the purposes of reporting under the MiFID II requirements. All of your personal data is protected to modern bank standards with 128-bit TLS encryption.