Risk glossary


Markets in Financial Instruments Directive (MIFID)

An EU directive issued in 2004 that came into force in 2007, which harmonised investment services regulations across European Economic Area states. MiFID added to the Investment Services Directive and furthered several concepts include ‘passporting’ (the ability to trade across the states if authorised in one), best execution, rules about transparency, order handling and others. Companies primarily trading in commodities and energy were largely exempted. These exemptions will expire with the introduction of MiFID II, which may require those in the energy markets to comply. The definitions in MiFID – particularly the definition of ‘financial instrument’ – are relied upon by many other European directives and regulations. As a result, the impact of MiFID cascades into the European Market Infrastructure Regulation (EMIR), the Regulation on Energy Market Integrity and Transparency (REMIT) and Capital Requirements Directive IV (CRD), among others.

* see also Investment Services Directive (2nd)

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