MiFID II Markets Regulation
European Union
2014
Consumer Protection
Tax & Reporting
Overview
The Markets in Financial Instruments Directive II (MiFID II), effective from January 3, 2018, is a European Union regulation designed to enhance transparency, investor protection, and market integrity across financial markets in the EU. It replaces and expands upon the original MiFID framework established in 2007.MiFID II applies to investment firms, trading venues, data reporting service providers, asset managers, and banks operating within the EU. The regulation mandates increased pre- and post-trade transparency, stricter reporting obligations, and stronger safeguards for retail investors.
Key Obligations
- Report all trades to regulators in near real time (transaction reporting)
- Ensure best execution for client orders across multiple venues
- Implement product governance and suitability assessments for clients
- Unbundle research and execution costs for investment advice
- Strengthen controls for algorithmic and high-frequency trading
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