The basics of MiFID 2

MiFID 2 is the revised “Markets in Financial Instruments Directive”, a broad set of European financial regulations that came into effect at the start of January 2018.

The original MiFID came into force in November 2007, just before the financial crisis. Its main intentions were to foster greater integration within Europe’s financial markets and to drive down trading costs, primarily for equites. The regulations also resulted in the creation of so-called multilateral trading facilities (such as Chi-X or Turquoise), which allowed equities of listed companies to be traded for the first time on platforms independent of large national exchanges, thus introducing competition and lowering the cost of trading.

Three years after the launch of MiFID, the European Commission (the executive arm of the European Union) began work on MiFID 2. The EC was keen to develop the existing legislation to build in lessons learnt from the financial crisis and to broaden its scope to encompass other asset classes. Simply put, the goal of MiFID 2 was to provide greater protection for investors and increase transparency throughout the capital markets.

Though the regulations do not specifically address listed companies (either inside or outside the EU), they dramatically impact the prevailing investment research and corporate access models offered by investment banks to institutional investors, which has significant knock-on effects for companies globally.

Perhaps the most relevant issue for IR teams that MiFID 2 seeks to address is how asset managers pay for research on companies and meetings with management, which they use to help them make investment decisions. Until now, asset managers received research, including written reports and phone calls with analysts, for ‘free’, i.e. the cost of this service was built into trading fees, which were often paid for by the fund managers’ clients. Conferences, roadshows and investment trips worked in a similar way. For the first time, fund managers are having to budget separately for research, corporate access and trading execution (something known as ‘unbundling’).

Faced with having to pay for these services themselves for the first time, investors are already becoming more selective in terms of what they consume. While it is still too early to understand the full impact of the new regulations, early indications point to an overall reduction in traditional research coverage and an increasing reliance on buy-side analysts over sell-side analysts. On the corporate access side, a decrease in investor attendance at broker-organised conferences and company roadshows seems inevitable, as investors look for more cost-efficient ways to study companies.


Main goals:

  • To make European markets more transparent and efficient;
  • To restore confidence in the capital markets following the financial crisis;
  • To move over-the-counter trading of various asset classes to established trading venues.


  • All 28 European Union countries;
  • A vast array of asset classes: equities, fixed income, commodities, currencies, futures, ETFs, retail products such as CFDs.

Who does it effect:

Almost everyone:

  • Companies in EU countries;
  • Companies in non-EU countries that operate in, or have investors in, the EU;
  • EU fund managers;
  • EU pension funds;
  • EU retail investors;
  • Indirectly (and to a lesser extent) fund managers in the US and Asia.

What does it mean in practice:

  • Unbundling of payments for research/corporate access from trading execution;
  • Introduction of volume caps for dark pools of equity;
  • Greater pricing transparency for OTC and off-exchange markets;
  • Tougher standards for financial and investment products.

Roadshow Dates To Avoid, 2nd Half 2017


  • 28 Aug-1 Sep: Summer bank holiday week
  • 4-6 Sep: Key EM Conference
  • 26-28 Sep: Key EM Conference
  • 23-27 Oct: School Half Term
  • 6 Nov: Key EM Conference
  • 13-14 Nov: Key EM Conference
  • 25-27 Dec: Christmas Holiday


  • 22 Sep: Key EM Conference
  • 29 Sep: Key EM Conference
  • 15 Oct: Assumption Day
  • 3 Oct: Day of German Unity
  • 29 Oct-2 Nov: Autumn School Holidays
  • 31 Oct: Reformation Day
  • 1 Nov: All Saints Day
  • 25-27 Dec: Christmas Holiday


  • 14 Jul: Bastille Day
  • 15 Aug: Assumption Day
  • 1 Nov: All Saints Day
  • 11 Nov: Remembrance Day
  • 25-27 Dec: Christmas Holiday


  • 12 Oct: Hispanic Day
  • 1 Nov: All Saints Day
  • 9 Nov: Our Lady of Almudera Day
  • 8 Dec: Immaculate Conception Day
  • 25-27 Dec: Christmas Holiday


  • 6 Nov: Day of Unity

Other Continental Europe:

  • 26 Oct: National Day (Austria)
  • 1 Nov: All Saints Day (Belgium, France, Germany, Italy, Luxembourg, Spain)
  • 11 Nov: Remembrance Day (Belgium)
  • 30 Nov: St Andrews Day (Scotland)
  • 5-8 Dec: Key EM Conference
  • 6 Dec: Independence Day (Finland)
  • 8 Dec: Immaculate Conception Day (Spain, Portugal, Italy)
  • 18-29 Dec: Christmas period (All)

New York / Boston

  • 4 Jul: Independence Day
  • 4 Sep: Labor Day
  • 6-7 Sep: Key EM Conference
  • 26-27 Sep: Key EM Conference
  • 9 Oct: Columbus Day
  • 10 Nov: Veteran’s Day
  • 23-24 Nov: Thanksgiving
  • 28-29 Nov: Key EM Conference
  • 25-27 Dec: Christmas Holiday


  • 9 Aug: National Day
  • 1 Sep: Hari Raya Haji
  • 18 Oct: Deepavali

Hong Kong

  • 25-Sep: Chinese Mid-Autumn Festival
  • 1 Oct: National Day
  • 17 Oct: Chung Yeung Festival

Dubai / Abu Dhabi

  • 1-3 Sep: Eid Al Adha
  • 18-19 Sep: Key Conference
  • 20 Sep: Key Conference
  • 22 Sep: Hijri New Year’s Day
  • 13-15 Nov: Key Conference
  • 30 Nov: Prophet Mohammed’s Birthday
  • 2-3 Dec: UAE National Day


  • 15 Jul: Democracy and National Solidarity Day
  • 30 Aug: Victory Day
  • 1-4 Sep: Kurban Bayrami
  • 29 Oct: Republic Day

Handling Investor Relations during a Crisis: Lessons Learnt from the 2011 Egyptian Revolution

This is a guest post from Omar Darwazah, Director,  Investor Relations at OCI N.V.

It seems that the entire world is in a constant crisis today. From Argentina to Russia to Turkey to the United States, there has been no dearth of crisis management situations which investor relations (IR) professionals have had to face. Whether it be political upheavals, civil wars, border disputes, fiscal disasters, wild foreign exchange fluctuations, military coups, capital controls, crazy presidential candidates or deeply entrenched state-sponsored corruption, investor relations professionals globally are finding it more difficult to craft their respective companies’ equity theses and messages to the investment community without finding themselves having to discuss geopolitics and global socio-economic trends. In 2011, I was Director of Investor Relations at Orascom Construction Industries (OCI) in Cairo, Egypt. I found myself in the middle of a historic event; I faced a systemic crisis that plagued the entire country as well as the company, it would forevermore change Egypt and its investment landscape.

On January 25, 2011, I readied to attend an annual Bank of America Merrill Lynch investor conference like I had done in years past. I boarded an 8am flight from Cairo to London to kick-off to OCI’s investor relations program and prepared presentations to current shareholders and prospective investors. Upon my arrival in London five hours later, however, the Egypt I had always known – run by the ironclad dictatorship of Hosni Mubarak and the brutality of his state police – had changed forever. A revolution was in the making. Thousands of people took to the streets to peacefully demonstrate en-masse against the regime. While I conducted meetings with investors on January 26, the state police clashed with protestors, the demonstrations turned violent, and the Egyptian equity index crumbled. The investors I was to meet at the conference turned to me for unbiased, candid interpretations of events on the ground.

As the revolution unfolded, the company’s CEO entrusted me to continue meeting investors. For 3 weeks I operated in crisis management mode and conducted over 70 one-on-one on-site meetings in London, Dubai, New York, Boston, Chicago, Frankfurt, Zurich, Geneva, Amsterdam and The Hague. JPMorgan invited me to lead a conference call with investor relations directors from other Egyptian blue-chip companies to advise them on handling the crisis. There was no hand-in-glove approach to managing the situation but I did share the following observations with my colleagues:

  1. The challenge of speaking to investors throughout the Revolution was primarily exacerbated by the lack of visibility on the ensuing chain of events
  2. Communicating with senior management on the ground in Cairo proved to be difficult given the lack of internet or mobile phone access throughout the 18 days of the Revolution
  3. For a contemporaneous update, I relied on speaking to various team and family members as well as friends by landline in order to provide investors with candid advice on the situation
  4. The routine questions on the performance of the company were never even asked and investors turned to me for unbiased interpretations of the unfolding events
  5. I combined my in-depth knowledge of Egypt, undergraduate training in Political Science and Economics and oratory skills to field difficult questions and deter a crisis within the global investment community. Speaking on behalf of the company and its performance became secondary in importance

In hindsight, the mere fact that I was present outside of Egypt and able to travel and meet investors proved to be extremely valuable. While serendipitous, the lesson learnt during my experience was that irrespective of the gravity of the crisis at hand, it is pertinent for IR professionals and management to be readily available and present to meet with the investment community even if they have bad news to report to them. That year, I ended up conducting over 300 one-on-one meetings in 25 cities globally. Here are some key takeaways from my experience:

  1. Investors appreciate full transparency and candidness during periods of high market uncertainty
  2. As an IR professional, be ready to simulate various scenarios during one-on-one meetings with investors with subsequent potential risks and mitigants of these scenarios
  3. Be ready to discuss broad topics that are typically not addressed during routine investor meetings
  4. Exogenous factors affecting company performance in times of uncertainty should be quantified as much as possible (i.e. impact on earnings, days of business interruption etc.)
  5. During a crisis, liaise closely with senior management and provide key updates and feedback from the broader investment community including analysts and investors as this helps with internal risk management
  6. Keep an open line of communication with the market, be ready to conduct a significantly larger number of investor meetings and global roadshows
  7. Disseminate factual information in writing in official company documents (i.e. press releases and results presentations) but leave speculative discussions, political opinions and forward looking statements in conversation only
  8. The best line of defense in a period of high and consistently evolving uncertainly proved to be a good offense (i.e. an aggressive roadshow strategy and meeting schedule)

That year, OCI’s share price outperformed almost all blue-chip companies on the EGX30 declining 30% versus almost 50% for the EGX30. Moreover, my crisis management strategy was acknowledged by the Middle East Investor Relations Society (MEIRS). As voted by the global buy-side and sell-side community, I won the MEIRS “Best Investor Relations in Egypt” award that year. I will no doubt face other crises during my IR career, they might not carry the same severity and intensity of the Egyptian Revolution in 2011 (or maybe they will!) but I believe the aforementioned takeaways are valuable in a multitude of crisis contexts; remember candidacy first, always.

2016 Global Trends in IR

BNY Mellon Depositary Receipts group has very recently published their annual report on global trends in investor relations. With 550 companies surveyed from 54 countries, it is probably the most comprehensive barometer of the current themes in our industry. The report provides large amount of comparative information on how listed companies are adapting to the changing marketing condition, touching on topics such as budgets, allocation of management’s time for buy side meetings, reporting lines, use of sell-side, measuring team effectiveness as well as insights into evolving areas such outreach to ESG investors and the use of technology.

Firstly as a qualifier, lets consider the demand side dynamics for global issuers. Despite the inevitable short and medium term swings in investor appetite for a given asset class, market or industry evidence that investors all around the world are diversifying and are increasingly adding a global component to their portfolios. Our own analysis point to over 4,000 institutional investors who hold emerging market securities, versus only 400 in early 20oo’s. BNY Mellon’s own estimates point to number of investors that hold DRs (or, roughly translated as those with global mandates) has increased from from 3,261 in 2Q10 to 4,533 in 2Q15. This figure will, we believe,  continue to grow, and present opportunities in areas where a- investors previously held most domestic bias and b- have considerable assets under management in active management and c- see diversification opportunities globally.

With this backdrop, a couple of things to note from the survey:

  • IR teams are working harder to address the growing global investment opportunity.  This is evidenced by 1- investor meetings taken by C-suite executives and IROs inside and outside their home markets have increased by 12.6% compared to 2013 (from 250.6 meetings in 2013 to 282.3 meetings in 2015). 2- companies almost doubling their IR budget allocation to travel, from 12.8% in 2013 to 24.3% in 2015, which in turn is interesting to contrast with the slight decrease in companies holding analyst/investor days (63% to 59%).
  • Top 10 sources of new investor demand in five years time, according to surveyed companies, will split evenly between emerging and frontier market. US, UK, China, Germany and Singapore lead the pact.
  • Technology tools, such as  conference call/webinar and video conference calls has been increasingly used in toolkit of a global IR officer (72% in 2015 vs. 63% in 2013 and 41% in 2015 vs. 34% in 2013). With the management and IR team time relatively fixed, and the buyside universe expanding – there is no element of a doubt that tools that help reach new investors can increase reach and efficiency, at a fraction of a price. We are strong advocates of using new tools to tell a company story . Can any one see how virtual reality or 360 videos can be applicable to the world of investor relations?
  • Despite the wave of regulations on how investors will pay for research and cooperate access, brokers continue to dominate the company non-deal roadshows arena, however with some signs of this changing. 10% of companies have organised NDRs themselves, up from 5% the previous year. Interestingly, companies rely a lot less on brokers nowadays to provide them with post meeting feedback, and rate quality targeting and introductions at upmost importance.
  • Growing ESG focus – The survey notes that there has been a strong increase (from 37% to 46%) in companies who have strategies in place to communicate with key investors on corporate governance issues on a regular basis, with top issues addressed being Board composition (76%), Transparency and disclosure (71%) and Remuneration (60%). Despite that the actual number of investors who reach out to ESG focused investors is still low (30%), however likely to rise. There is evidence to suggest that institutional investors are increasingly committing to ESG-focused principles in their strategies — whether that be through a more active engagement as shareholders or divestment strategies. 

Source: BNY Mellon Depositary Receipts Market Review 2015, BNY Mellon Global Trends in Investor Relations 2015

A Framework for Investor Targeting

Investment profile of my company

The starting point of any investor targeting exercise is to build a solid understanding of how your company’s story can fit into criteria that global investors look for when screening for companies: liquidity, key fundamental metrics and non-financial highlights.

Things to consider:

  • Does my company’s liquidity, or average daily trading volume (ordinary shares and depositary receipts combined) meet institutional investor requirements? Minimum threshold for large institutional investors is on average $1million+ per day. Smaller funds or those focused on the mid-/small-cap segment of the market often have more flexibility, however also tend to have fewer resources and less support (corporate access, investment research) from brokers.
  • Compared to the regional and broader EM peer group, which set of fundamentals particularly stands out in my equity story?
  • How are we positioning our collateral to address the needs of investors with particular strategies (e.g. Income/Yield, Growth, Value etc)? Do we have a good understanding of the triggers of the investment decision on those funds?
  • What are the key non-financial metrics that matter in my story? What macro- or mega-industry trends is my company’s equity story continually benefiting from?

Opportunity Analysis

Many companies take a technical, if not scientific, approach to identifying investor opportunity. A starting point is to conduct a comprehensive analysis of your own shareholder base, factoring in significant movements over the past four quarters.

Next, an institutional investor study draws up a target investor groups based on a number of criteria:

  • Investors who are already present in my shareholder register
  • Investors who are invested in my peer group but not in my company
  • Investors who have held my company’s shares previously but do not currently hold them
  • Investors who have been increasing allocations to my region and/or my sector
  • New EM funds launched globally over the last 12 months
  • New ideas of investors from brokers and other consultants

Things to consider:

  • Do I have a clear understanding which investors with active mandates hold my regional and international peer group? How often am I monitoring changes and activity in this list? Are the changes in line with what we are seeing in our shareholder base? If not, what are the drivers of the outliers?
  • Am I monitoring developments in the passive and ETF industry and do I understand which benchmarks my company is part of? What are my company’s allocations to each of those indices?
  • How often am I monitoring broader fund flows into my region and comparing this to what we are seeing in my company’s shareholder base?


Following this, companies often group investors into tiers, which then dictate the outreach strategy for the year. For illustration purposes the following example may be helpful:

All investor tiers have access to ‘passive channels’ which include IR website/web casts, annual report, IR mailings / press releases, IR events (R&D day, etc.), quarterly conference calls, event-driven/product conf. calls, phone & email contact with IR

The study can then be applied to three key geographies: Europe, North America and Asia.

Twitter Top 30 for Investor Relations



While there is growing evidence that investor relations teams are slowly moving away from using social media as we know it to reach investors, Twitter is increasingly used by fund managers, analysts, journalists and policymakers to communicate interesting ideas and comments, all of which it is well worthwhile staying on top of.

Last year, we published the first edition of our Twitter Top 30 for Investor Relations, and today we are glad to announce the 2016 update. We were particularly interested in adding to our list individuals who discuss current issues and trends relating to asset allocation, investment strategies and investor relations – especially those who encourage debate and a further exchange of ideas.

If you feel we have missed anyone, give us a shout on @closir. Many thanks to those who helped us to build this list during the last year. We hope you enjoy this year’s list.

Our 2016 Top 30:

@Schroders: Schroders maintains an active feed of insights on the global economy via links to their thought pieces, interviews with fund managers, polls and videos. The highlights here are posts with infographics, which portray an often complex story in easily digestible images. (Web)

@Enterprising : Enterprising Investor is CFA Institute’s own blog, delivering a solid analysis of current issues in finance and investing, including a wide variety of topics on portfolio management, corporate finance or behavioural economics. We particularly enjoy their coverage of the CFA Annual Conference (usually in April), where the blog does a great job of summarising messages from key speakers. Also worth adding are the CFA’s own accounts @CFAinstitute and @CFAemea. (Web)

@ftfm: FTFm is The Financial Times’s Monday weekly supplement focusing purely on news in fund management. Expect plenty of coverage on investment trends, regulation and other hot topics. Our favourite section is the one-on-one interviews with chief investment officers of global investment houses; their rundown of key executive appointments in the city is also very handy. (Web)

@IRMagazine: IR Magazine is probably the most comprehensive source of news relating to the investor relations industry. The magazine has gone through a few changes over the last year or so, with the addition of many more contributing editors, each offering a unique perspective on a vast array of topics relating to the day-to-day role of an investor relations officer. (Web)

@EastCapital: East Capital is a specialist emerging market investor from Stockholm, based on the ground in a number of markets. Expect dispatches and newsletters from portfolio managers and economists on the rapidly evolving situation in emerging and frontier markets. East Capital’s blog, Look East, is also known for documenting various trip reports written by portfolio managers during their travels. (Web)

@johnauthers: John Authers is one of our favourite financial market commentators. Most interesting and perhaps relevant to us are his ‘big picture’ insights on the fund management industry (especially around regulation, active vs. passive and fees for example) as well as ongoing discussions around drivers of change. We also enjoy the short 2-3 minute video summaries that he sometimes records alongside the posts. His colleagues Steve Folley (@stephenfoley), Martin Wolf (@martinwolf_) and Gideon Rachman (@gideonrachman) complete an impressive FT line-up. (Web)

@TheEconomist: Buttonwood’s Notebook is The Economist’s own section on financial markets. And in case you were wondering, it is named after the Buttonwood Agreement of 1792 which gave birth to the modern day New York Stock Exchange, signed under a buttonwood tree. Perhaps uniquely the column often reviews and comments on academic research affecting the fund management industry. (Web)

@MarkMobius: Mark Mobius is an emerging market fund manager at Franklin Templeton, and is perhaps one of the most prominent figures in our industry. In his ‘Investment Adventures in Emerging Markets’ blog he provides a factual and candid analysis of EMs, as well trip reports for various markets. His most recent updates include trip reports are dispatched from Sri Lanka, Iran and China. (Web)

@EM_Comms – EM is a Moscow, London and Hong Kong based financial PR and IR agency covering emerging markets, IR/PR spaces and the influential role digital technologies can play. The recently launched Moscow AM daily email  provides a unique take (in English) on key developments in the country.

@danielgodfrey_ – Daniel Godfrey is the recently departed chief of the UK’s Investment Association (@InvAssoc) which represents the the views of some 200 investment managers who manage over £5.5 trillion. Expect highly relevant views on the investment management industry, especially in the UK.

Investor Relations Societies around the world provide a highly useful stream of news, developments, and trends in the world of investor relations. We particularly enjoy the updates from the UK IR Society @IRSocietyUK, the Middle East IR Society (@meirsociety), as well as the New York chapter of NIRI in the US (@niri_ny).

@Jerome_Booth – You may know Jerome Booth as the Head of Research for Emerging Markets at Ashmore Group. He has since moved on to set up a new investment vehicle called New Sparta Limited, wrote a book titled, Emerging Markets in an Upside Down World and continues to write highly relevant commentary on emerging markets and their role in the global economy. (Web)

@TToomseSmith – Thomas Toomse-Smith works with the UK’s Financial Reporting Council @FRCnews, the UK independent regulator responsible for promoting high quality corporate governance and reporting to encourage greater investment. He is particularly interested in the future of electronic reporting and publishes a number of interesting surveys and opinions throughout the year. (Web)

@dr_holtmann  -Dr Kai Holtmann carries a wealth of industry knowledge and his handle covers capital markets related business/economic/social issues with a particular focus on corporate governance and ESG.

@HarvardCorpGov – This Harvard Law School forum provides extensive research on Corporate Governance and Financial Regulation, including updates on their working papers, seminars, speakers, and other activities. Highly captivating isights with increasing relevance to the investor relations profession. (Web)

@CopleyFR – Follow Steven Holden for highly interesting pieces about investment flows to/from emerging markets. He backs his research with a large number of data points and provides meaningful context that explain the numbers.

@jpmorganfunds – JP Morgan Asset Management’s handle provides a large amount of context to the current global investment environment. The most interesting pieces are the weekly market commentary as well as their highly quantitative quarterly guide to markets. In terms of other fund managers we recommend adding feeds from Neuberger Berman (@neubergerberman), Investec AM (@investecam_uk), State Street (@StateStreet) and Barings (@Barings).

@tombuerkle – Tom Buerkle is the International Editor at Institutional Investor magazine group (@iimag) who writes about global developments that particularly affecting professional investors, with the occasional weather update! (Web)

@ForeignAffairs – With today’s geopolitical climate occupying the minds of many portfolio managers of global active funds, and especially so the ones focusing on emerging markets, we find Foreign Affairs Magazine’s coverage of events extremely informative. Their most recent pieces take an in-depth look into conflicts in the Middle East, the relationship between Russia and China as well as Brazil’s place in the emerging market export club. (Web)

@Joe_Mcalinden – Joe Mcalinden is former CIO at Morgan Stanley Investment Management, providing interesting macro comments and updates with a particular focus on the US. He also frequently touches on the Federal Reserve’s actions and policies, and their impact on global equity markets.

@profaminrajan –  Professor Amin Rajan is the founder of CREATE Research, a  London-based Asset Management Think Tank. He publishes a variety of thought papers on the state of the AM industry and identifies key forces that will shape it in the future. (Web)

@annairrera – Our Top 30 list would not be complete for us without a financial technology flavour. Anna Irrera covers trading and tech reporting at Financial News, offering insights on a wide variety of topics ranging from blockchain to robo advisors to trading technology, and much more.