Markets in Financial Instruments Directive
| European Union directive | |
| Title | Directive on markets in financial instruments |
|---|---|
| Made by | European Parliament and Council |
| Made under | Article 47(2) TEC |
| Journal reference | L145, 30 April 2004, pp. 1–44 |
| History | |
| Date made | 21 April 2004 |
| Came into force | 30 April 2004 |
| Implementation date | 1 November 2007 |
| Preparative texts | |
| Commission proposal | |
| EESC opinion | |
| EP opinion | |
| Reports | |
| Other legislation | |
| Replaces | 93/22/EEC |
| Amends | 85/611/EEC, 93/6/EEC, 2000/12/EC |
The Markets in Financial Instruments Directive 2004/39/EC (known as "MiFID") as subsequently amended is a European Union law that provides harmonised regulation for investment services across the 31 member states of the European Economic Area (the 28 EU member states plus Iceland, Norway and Liechtenstein). The directive's main objectives are to increase competition and consumer protection in investment services. As of the effective date, 1 November 2007, it replaced the Investment Services Directive (ISD).
MiFID is the cornerstone of the European Commission's Financial Services Action Plan, whose 42 measures will significantly change how EU financial service markets operate. MiFID is the most significant piece of legislation introduced under the Lamfalussy procedure designed to accelerate the adopting of legislation based on a four-level approach recommended by the Committee of Wise Men chaired by Baron Alexandre Lamfalussy. There are three other "Lamfalussy Directives"—the Prospectus Directive, the Market Abuse Directive and the Transparency Directive.
MiFID retained the principles of the EU "passport" introduced by the Investment Services Directive (ISD) but introduced the concept of "maximum harmonization" which places more emphasis on home state supervision. This is a change from the prior EU financial service legislation which featured a "minimum harmonization and mutual recognition" concept. "Maximum harmonisation" does not permit states to be "super equivalent" or to "gold-plate" EU requirements detrimental to a "level playing field". Another change was the abolition of the "concentration rule" in which member states could require investment firms to route client orders through regulated markets.
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