MiFID II
The EU framework governing investment firms, trading venues and the secondary market for financial instruments - the regulatory bedrock under which much of modern European finance operates.
What MiFID II covers
MiFID II (Directive 2014/65/EU) and its sister regulation MiFIR (600/2014) together regulate investment firms, trading venues, market data, transparency, transaction reporting, investor protection and conduct of business across the EU. Effective since 3 January 2018, MiFID II is one of the densest pieces of financial-services regulation ever produced - over 30,000 pages including Level 2 and Level 3 material.
Pillars
- Authorisation and passporting - single regime for investment firms.
- Market structure - Regulated Markets, MTFs, OTFs, SIs.
- Pre-/post-trade transparency - extended beyond equities to bonds, structured products, derivatives.
- Best execution - Article 27 and RTS 27/28 (the latter now revoked).
- Investor protection - suitability, appropriateness, costs and charges disclosure.
- Transaction reporting - Article 26 of MiFIR.
Recent evolution
The MiFID II/MiFIR review package (in force progressively from 2024) introduces the EU consolidated tape, recalibrates pre-trade transparency thresholds, and updates the rules on systematic internalisers. MiCA takes a structural inspiration from MiFID II for its CASP licensing regime.
Why it still matters
Any business providing investment services, operating a venue or trading financial instruments in the EU operates under MiFID II. Even MiCA-regulated crypto businesses end up touching MiFID II perimeter once tokens qualify as financial instruments (security tokens, tokenised securities).