Markets in Financial Instruments Directive II

ESG
:   
Regulatory
March 1, 2024

MiFID II stands for the "Markets in Financial Instruments Directive II." It's a law in the European Union (EU) that regulates companies providing services linked to financial instruments (like stocks, bonds, units in collective investment schemes, and derivatives) and the places where those instruments are traded (like stock exchanges). Think of it as a set of rules to make financial markets more transparent, safe, and fair for everyone, especially for individual investors. Here are some key points:

  • Transparency: MiFID II makes sure that trading, including prices and costs, is more transparent. This means investors can see more clearly what they are buying, how much it costs, and the market conditions.
  • Protection for Investors: It puts a lot of emphasis on protecting investors. Companies need to ensure that they are acting in the best interests of their clients, providing them with clear information, and warning them about risks.
  • Testing Financial Products: Before a company can sell a financial product to a client, they must check if it's suitable or appropriate for that client, based on their financial situation and investment goals.
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