The recast Markets in Financial Instruments Directive (2014/65/EU) (MiFID2) and Markets in Financial Instruments Regulation (MiFIR) set out a harmonised EU framework for the regulation of investment services and activities. MiFID2 and MiFIR set out a licensing and passporting regime for EEA investment firms and conduct of business requirements applicable to firms (including investment firms, credit institutions and fund managers) providing investment services and activities in the EEA. They also regulate trading venues and data reporting service providers.

Although the original Markets in Financial Instruments Directive 2004/39/EC (MiFID1) was widely regarded to have successfully achieved its main objectives (by increasing investor protection and competition), the vulnerability of financial markets after the financial crisis and the significant market developments since the implementation of MiFID1 in 2007 prompted further reforms introduced under MiFID2 and MiFIR. 

The key changes introduced by MiFID2 and MiFIR include: 

• an overhaul of market structure, including the introduction of a new multilateral, discretionary trading venue for non-equities, the Organised Trading Facility (OTF);
• increased transparency and transaction reporting requirements;
• equities and derivatives trading obligations;
• heightened conduct of business requirements and supervisory enforcement powers;
• much greater regulation of commodities business including position limits and reporting; and  
• new rules for "third country" (i.e. non-EU) firms accessing EU markets.