MiFID is the Markets in Financial Instruments Directive of the European Union. The Financial Service Authority (FSA) of Great Britain participated in the development of the Directive. This directive replaces the previous Investment Services Directive (ISD) and is part of the EU's plan to create a single European market for financial instruments and services.
MiFID requirements apply to the 27 member states of the European Union and 3 countries of the European Economic Area.
MiFID introduces new regulatory rules aimed, in particular, at increasing the transparency of reporting on transactions in shares and derivatives. The main areas of application for MiFID are:
The activities of exchanges and other not currently regulated trading institutions;
Establishment of pre- and post-trade transparency requirements for transactions with securities;
Expansion of the range of investment services and products requiring authorization;
Providing the opportunity to carry out international activities through the opening of branches in other EU countries for investment companies that have previously received authorization from national regulators.
The directive, among other things, requires investment firms to make a number of changes to their operating procedures, such as reporting transactions and storing information for five years.
The MiFID Directive entered into force on November 1, 2007.