Inside this Topic Guide
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.
|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. 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) on consolidated tape providers 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.
The co-legislators have agreed proposed amendments to MiFID2 and MiFIR in relation to the regulation of data reporting services providers (under the so-called Omnibus 3 package) and in relation to the third country regimes (under the Investment Firms Directive and Regulation). These amendments are expected to be published in the Official Journal later in 2019.
The transitional opt-out from MiFIR open access requirements in relation to ETDs will end on 3 July 2020.
The Commission is due to report on its review of the functioning of various aspects of MiFID2 and MiFIR by 3 March 2020.
|Maria Luisa Alonso (Madrid)||Caroline Dawson (London)|
|Chris Bates (London)||Simon Gleeson (London)|
|Marc Benzler (Frankfurt)||Frédérick Lacroix (Paris)|
|Anna Biala (Warsaw)||Owen Lysak (London)|
|Lucio Bonavitacola (Milan)||Caroline Meinertz (London)|
|Peter Chapman (London)||Monica Sah (London)|
|Simon Crown (London)|