January 3, 2017


The amended Markets in Financial Instruments Directive (MiFID II) will take effect on 3 January 2018. It’s a response to the unanticipated consequences of the original MiFID regime, taking into account developments that have occurred within the trading environment as well as the lessons learned from the financial crisis.

MiFID II and MiFIR: What’s the difference?

The MiFID regime comprises both the directive (MIFID II) and the regulation (MiFIR). The directive introduces substantive changes to the old regime and needs to be transposed into national law by each EU member state.

It is accompanied by the regulation which will be immediately enforceable as law across the European Union. MiFIR seeks to enforce and harmonise the implementation of MiFID II.

What is the aim of MiFID II/MiFIR?

The overarching aim of MiFID II/MiFIR is to “level the playing field in financial markets” by rectifying their inefficiencies, improving their functioning, and ensuring greater transparency and resilience.

The directive has five clear objectives:

  • To introduce a new regulated trading platform: Organised Trading Facility (OTF)
  • To strengthen pre- and post-trading transparency
  • To increase investor protection
  • To promote financial stability and orderly markets
  • To increase competition in trading and clearing markets

The new directive's scope goes much further than the initial directive and will have significant impacts on many financial firms' business and operating model.