Markets in Financial Instruments Directive 2004

What is the Markets in Financial Instruments Directives 2004?

A European Union law that implements co-operative regulation for the investment services that are offered in the 31 member states in the European Economic Area. The main purpose of the directive is to increase consumer protection and competition in investment services.

Where have you heard about the Markets in Financial Instruments Directives 2004?

The aim of Markets in Financial Instruments Directives (MiFID) was to replace the investment services that were created in 1993. While the law did succeed in many of its aims, mainly expanding choices and lowering prices for investors, deficiencies in the law became apparent during the financial crisis in 2008.

What you need to know about the Markets in Financial Instruments Directives 2004.

The determination of which companies are effected by MiFID and which are not is distinguished between “investment services and activities” and “ancillary services”. If a company performs under both of these terms or just “investment services and activities” then it is subject to MiFID. However, if they only perform “ancillary services”, they are not subject to it. The Markets and Financial Instruments Directives covers all tradable financial products apart from specific foreign exchange trades. This includes commodities and derivatives such as climate and carbon.