Acronyms, who doesn’t love ’em? From the United States with agencies such as FBI, CSI, NCIS, FCC, etc. To Europe with ESMA, OPCW, or NATO. In turn, institutions and organizations like to use them too for their rules. It are these regulations that I’d like to clarify. Since there are quite a few that specifically impact investors/traders, I created this series.
“European Acronyms” is pretty straight-forward. In the coming weeks and months, I’ll be going over various terms that appear often in the news and media, and that also have an impact on us investors.
In this post, I’ll clarify MiFID (II) or Market in Financial Instruments Directive and Regulation. I’ll answer the following questions:
- What it is
- Why it was created
- Who it’s for
- What impact it has on (retail) investors
The first version of MiFID implemented new measures, such as pre- and post-trade transparency requirements, and created rules of conduct for the EU’s financial firms. the first version of MiFID primarily focused on Over The Counter (OTC) transactions.
You might think that MiFID was created after the 2008 financial crisis, but it actually came into effect prior to that. The EU did make changes in light of the crisis.