Markets in Financial Instruments Directive (MiFID) | Finance Watch

MiFID is a directive that covers all the investment services in financial products in Europe. The directive sets in particular the European rules for trading of shares. MiFID also aims at protecting the consumers of financial products by imposing information requirements on providers of investment services in relation to their clients.

The directive came into force in 2007 and led to a deregulation of stock markets. Stock exchanges have been put into competition with new alternative trading venues, the latter benefiting from softer rules in particular as regards transparency.

The Commission on 20 October 2011 published a proposal to review the MiFID Directive, and to introduce a separate Markets in Financial Instruments Regulation (MiFIR) to make the requirements more binding and harmonized across member states. This is because a regulation is directly applicable in member states, whereas a directive must be transposed (?implemented?) in national law in all 27 member states.

European Parliament rapporteur Markus Ferber (EPP, Germany) is expected to present his draft position in the Spring of 2012 ? negotiations between the institutions will most likely take until the end of 2012. The new rules in the regulation would apply nearly immediately after publication of the agreement; the changed directive will need to be implemented in member states during 2013 and 2014.

Ahead of his draft reports (one on MiFID and one on MiFIR), Mr Ferber issued a working document and a questionnaire to stakeholders. The deadline for responses to the? questionnaire was 13 January 2012; a copy of Finance Watch?s response to the questionnaire can be found at the link below. Finance Watch plans to publish a more detailed position paper on the legislation in the next weeks.

Working Document

Questionnaire ? Finance Watch response

For more details, see the European Commission?s MiFID webpage.

(text updated 16 January 2012)

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Source: http://www.finance-watch.org/2012/01/mifid/

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