MiFID2 and MiFIR

Topic Guides

MiFID2 and MiFIR herald important changes to the regulation of financial markets in Europe. This Topic Guide helps you navigate both the legislation itself and the complex array of secondary rules through which it is being implemented and allows you easy access to briefing notes and other materials prepared by Clifford Chance's team of financial regulation experts.

Inside this Topic Guide

Topic overview and current status

The European Commission initiated a consultation to review the Markets in Financial Instruments Directive (MiFID1) in 2010 and went on to publish a formal legislative proposal to amend MiFID1 (including a proposal for a new Directive and a Regulation) on 20 October 2011. Although MiFID1 is 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 reform.

The new legislation comprises a Directive (MiFID2) and a Regulation (MiFIR) which together amend and recast aspects of MiFID1.

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;
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.

Status:

MiFID2 and MiFIR were published in the Official Journal of the European Union on 12 June 2014. Originally scheduled to apply from 3 January 2017, their implementation was delayed by one year to 3 January 2018 under the MiFID2 Amending Directive and MiFIR Amending Regulation published in the Official Journal on 30 June 2016. The two delegated Regulations and one delegated Directive required under MiFID2/MiFIR were published in the Official Journal on 31 March 2017 and entered into force on 20 April 2017.

MiFID2 was required to be transposed into national law by 3 July 2017. Member States required to apply the measures from 3 January 2018 except for provisions transposing Article 65(2) which will apply from 3 September 2019. MiFIR and most provisions of the Delegated Regulations, regulatory technical standards (RTS) and implementing technical standards (ITS) apply from 3 January 2018. The status of the RTS and ITS is indicated in the Technical Standards table in the Legislation: Level 1 and Level 2 section below.

Final ESMA guidelines on suitability under Article 25(2) of MiFID2 and Articles 54 and 55 of the MiFID2 Delegated Regulation to be published.

Certain Member States are yet to transpose or fully transpose MiFID2 into national law. The European Commission webpage on national implementation sets out the current status.