The Markets in Financial Instruments Directive, commonly known as MiFID, is a law that was created by the European Union for the purpose of regulating all investment services in member states of the European Economic Area (EEA).
The European Economic Area (EEA) combines the countries of the European Union (EU) and member countries of the European Free Trade Association (EFTA) to facilitate participation in the European Market trade and movement without having to apply to be one of the EU member countries.
The Markets in Financial Instruments Directive (MiFID) is a European regulation that increases the transparency across the European Union’s financial markets and standardizes the regulatory disclosures required for firms operating in the European Union.
The goal of the Markets in Financial Instruments Directive (MiFID) is to increase transparency across EU financial markets and to standardize regulatory disclosures for firms.
MiFID implemented new measures, such as pre- and post-trade transparency requirements, and set out the standards of conduct to be followed by financial firms. MiFID has a defined scope that primarily focuses on stocks.
The EU hoped that the directive would help to increase competition among investment services while also boosting consumer protection and providing harmonious regulations for all participating states.
The directive was drafted in 2004 and has been in force across the European Union (EU) since 2007.
In 2018, a new law, known as MiFID II, has since replaced MiFID.