MiFID II: change and prescription

On 20 October, the European Commission presented its legislative proposals for a package of measures to update the Markets in Financial Instruments Directive (MiFID). Known as MiFID II, they take the form of a revised version of the current MiFID Directive and a separate regulation (MiFIR). Emma Radmore looks at the drivers for change and the key provisions.

Emma Radmore is a senior associate and professional support lawyer in the London financial markets and regulation practice of SNR Denton. Contact her at emma.radmore@ snrdenton.com.

Why change?

Although MiFID has been in force in national legislation for only four years, and itself was a radical revision of its predecessor, the Investment Services Directive, it is already somewhat behind the times. The Commission is pleased that MiFID achieved Europe-wide competition between traditional exchanges and alternative venues, and that it gave banks and investment firms a good quality ‘passport’ to provide services into other EU member states. It notes the resulting competitive markets and greater choice of service providers. But several factors, including MiFID’s success, have led to the need for change: