MiFID II was the second iteration of the European Union regulation, which aimed to increase the transparency across the bloc's financial markets, especially around costs, and standardise the regulatory disclosures required for firms operating in the region.
The first MiFID policy was originally drafted in 2004 and was readdressed following the Global Financial Crisis.
The latest update, MiFID II, replaced the primary version in 2018, but was only officially implemented in August last year.
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Abhimanyu Chatterjee, chief investment strategist at Dynamic Planner, described the regulation as "wide ranging, especially around the investment advice firms could provide to clients".
Edinburgh-based abrdn explained several of the major changes to clients on its website, including the requirements for asset managers to suitably assess the appropriateness of any investment services or financial instruments for the client, and allow firms to enter into transactions in which there may be an actual or potential conflict of interest, "so long as firms can ensure that those transactions are effected in such a way that the client is not disadvantaged".
Fund managers would also be required to provide ESG data in a standardised format for all products marketed in the EU to fund distribution channels, so that distributors can evaluate the end client sustainability preferences.
The accessibility of critically comparative ESG data has been an ongoing struggle, as different firms rank the criteria weighting and scores differently, making it arguably tougher to compare assets from an ESG perspective.
But under MiFID II, managers were not permitted to accept free research from firms providing them with trade execution services.
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Chancellor of the Exchequer Jeremy Hunt promised a review of investment research rules but there has yet to be any official shift in policies related to MiFID post-Brexit.
As managers continue to untangle the practical application of the policy, Chatterjee was certain it would "ultimately be instrumental in the way investment managers work" and make them "more unaccountable for their products, as its primary objective is to protect investors and strengthen the regulatory and compliance ecosystem".
"As with any regulatory change, MiFID II comes with spirited debate from both sides of the yay and naysayers," he said.
For Keith Watson, investment manager of CQS Natural Resources Growth and Income fund, the nuclear energy sector is likely to be a clear benefactor of the policy long term, as "it is the only carbon free form of baseload electricity generation".
The European energy crisis prompted governments to reassess the expected pace of their energy transitions, and Watson pointed out that some had begun to examine more "progressive approaches", including nuclear.
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Hunt confirmed nuclear energy will be classed as environmentally sustainable in this year's Spring Budget, stating the UK "needs another critical source of cheap and reliable energy - and that is nuclear".
Watson said: "In markets such as the US and Europe, where nuclear generates some 20% or more electricity, governments previously reluctant to commit to the sector, have enacted rational, pro-nuclear policy amendments: crediting the value of their 24/7 generating capability, extending the operating lives of existing power stations and encouraging development of new reactors. In Asia, the appeal of nuclear is undiminished and the region remains a growth driver."
He highlighted the Geiger Counter trust, which invests in companies involved in the exploration, development and production of uranium to supply the nuclear power industry, as a potential benefactor of this shift, and MiFID II.
"[Its] share price has lagged the increase in net asset value, provides investors an efficient means to gain exposure to the sector whose outlook has improved dramatically," Watson said.
It is currently running at a 21.9% discount, according to data from the Association of Investment Companies.
Chatterjee added that while the primary and secondary impacts of the regulation continue to emerge, the core question remains of who is buying products and how: "If the answers to any of these questions are in balance positive, it will have done much to take the investment industry ahead in terms of credibility.
"It is an effort to make investment practitioners appear as partners to the life journeys of investors, helping them focus on what is important to them, their life goals and objectives."