What is MiFID?
Markets in Financial Instruments Directive (MiFID), is the European Directive that has been adopted by all member states of the European Economic Area and is in full force since 1st November 2007.
In Cyprus the adoption (transposition) of MiFID has been performed by Law 144/2008.
It refers to the provision/performance of investment services/activities and the operation of regulated markets. The main objectives of the Directive are to increase competition and consumer protection in investment services.
Scope of MiFID
Which Firms are affected by MiFID?
If a firm performs investment services and activities, it is subject to MiFID in respect both of these and also of ancillary services (and it can use the MiFID passport to provide them to member states other than its home state). However, if a firm only performs ancillary services, it is not subject to MiFID (but nor can it benefit from the MiFID passport).
MiFID covers almost all tradable financial products with the exception of certain foreign exchange trades. This includes commodity and other derivatives such as freight, climate and carbon derivatives.
MiFID applies to:
·Banks
·Co-operative Societies
·Investment Firms
·Regulated Markets
Key Areas of MiFID
·Authorization, regulation and passporting
·Client categorization
·Client order handling
·Pre-trade transparency
·Post-trade transparency
·Best execution
·Conflict of Interests
·Outsourcing