MiFIRMiFID

MiFIRMiFID refers to a set of European Union financial regulations, specifically the Markets in Financial Instruments Regulation and the Markets in Financial Instruments Directive. These regulations aim to increase transparency, improve investor protection, and reduce systemic risk within financial markets. They apply to a wide range of financial firms, including investment firms, trading venues, and data reporting services.

MiFIR focuses on the technical aspects of market operation. It introduces rules on trade transparency, including pre- and post-trade reporting requirements for various financial instruments. It also establishes rules for trading venues, such as regulated markets and multilateral trading facilities, to ensure fair and orderly trading. Furthermore, MiFIR sets out requirements for investment firms regarding the reporting of transaction data to national competent authorities.

MiFID II, on the other hand, is the directive that complements MiFIR. It expands the scope of regulation to cover more types of firms and activities. Key aspects of MiFID II include enhanced investor protection measures, such as rules on product governance, inducements, and best execution. It also introduces requirements for independent investment advice and mandates more detailed disclosure of costs and charges to clients. The objective is to ensure that financial products are suitable for the intended investors and that clients are fully informed about the risks and costs involved. Together, MiFIR and MiFID II represent a significant overhaul of the EU's financial regulatory framework.