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About MiFID
What is MiFID?
The Markets in Financial Instruments Directive (Directive 2004/39/EC). MiFID is a major part of the European Union's Financial Services Action Plan (FSAP), which is designed to create a single market in Financial Services.
MiFID replaces and greatly extends the coverage of the Investment Services Directive (ISD) and introduces new and more extensive requirements to which financial institutions will have to adapt, in particular to the conduct of business and internal organisation.
MiFID's key objectives are:
- to increase investor protection throughout the European Union
- improve the transparency and efficiency of European Financial Markets
- allow investment firms to provide services across all member states based on the authorisation of their home state.
Why is it important?
MiFID covers such a broad front that all aspects of the investment business will be affected - from client relationships, through trading to pre- and post-trade reporting. It could lead to wholesale changes to the market structure and how it operates. All investment firms and all parts of firms are likely to be affected to some extent.
The expected timetable is:
- 31 January 2007 - Transposition deadline. Member states required to have implementing measures in place.
- 1 November 2007 - Implementation deadline.