MiFID II/MiFIR was applied for on the 3rd of January, 2018.
This new legislative framework strengthens investor protection and improves the functioning of financial markets making them more efficient, resilient and transparent.
MiFID is the Markets in Financial Instruments Directive (2004/39/EC). It has been applicable across the European Union since November 2007. It is a cornerstone of the EU's regulation of financial markets seeking to improve their competitiveness by creating a single market for investment services and activities and to ensure a high degree of harmonised protection for investors in financial instruments.
MiFID sets out:
conduct of business and organisational requirements for investment firms;
authorisation requirements for regulated markets;
regulatory reporting to avoid market abuse;
trade transparency obligation for shares; and
rules on the admission of financial instruments to trading.
On the 20th of October, 2011 the European Commission adopted a legislative proposal for the revision of MiFID which took the form of a revised Directive and a new Regulation. After more than two years of debate, the Directive on Markets in Financial Instruments repealing Directive 2004/39/EC and the Regulation on Markets in Financial Instruments, commonly referred to as MiFID II and MiFIR were adopted by the European Parliament and the Council of the European Union. They were published in the EU Official Journal on the12th of June 2014.
MiFID II IMPROVEMENTS
MiFID II and MiFIR will ensure fairer, safer and more efficient markets and facilitate greater transparency for all participants. New reporting requirements and tests will increase the amount of information available, and reduce the use of dark pools and OTC trading. The rules governing high-frequency-trading will impose a strict set of organisational requirements on investment firms and trading venues, and the provisions regulating the non-discriminatory access to central counterparties (CCPs), trading venues and benchmarks are designed to increase the competition.
The protection of investors is strengthened through the introduction of new requirements on product governance and independent investment advice, the extension of existing rules to structured deposits, and the improvement of requirements in several areas, including on the responsibility of management bodies, inducements, information and reporting to clients, cross-selling, remuneration of staff, and best execution.