January 31, 2018


The Markets in Financial Instruments Directive 2004/39/EC, MiFID I, was implemented in 2007 and was seen as the cornerstone of European Union (EU) financial services law. In 2014, the original regime was repealed and gave way to the adoption of the MiFID II regime, a legislative framework comprising of both the Directive (MiFID II) and the Regulation (MiFIR).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 EU and seeks to enforce and harmonise the implementation of MiFID II.

The new MiFID regime is a response to the unanticipated consequences of the original MiFID legislation, taking into account the developments within the trading environment since MiFID I’s implementation as well as the lessons learnt from the 2008 financial crisis.


The Markets in Financial Instruments Directive II (MiFID II) is one of the most significant regulatory changes faced by our industry in 2017. The directive impacts the entire investments lifecycle as it enhances and expands regulation of financial institutions within the European Economic Area (EEA) as well as those providing services cross-border.

MiFID II applies to those financial services businesses undertaking MiFID business anywhere in the EU as well as those providing services cross-border.  This includes investment firms, trading venues, data reporting service providers and third country firms providing investment services or performing investment activities into the EU (either on a services basis or via a branch). MiFID II impacts all areas of Pershing and provides clients and particularly wealth managers with increased obligations.

MiFID II took effect from 3 January 2018.

What are the core objectives of MiFID II?

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.

  • Increased market transparency
  • Increased investor protection
  • Increased integrity of the market and financial stability
  • Increased supervisory powers
  • Technical innovations
  • Increased oversight of commodity markets
  • High standards for managerial competence
  • Increased harmonization of administrative sanctions
  • Increased alignment of regulation across the European Union (EU)