The Markets in Financial Instruments Directive known as MiFID is a subsequently amended of European Union law witch provides harmonized regulation for investment services at 31 member states from the European Economic Area witch includes those 28 EU member states and Iceland, Norway and Liechtenstein. MiFID was implemented on 1 November 2007 and has as main objective to increase competition on trading market and also the consumer protection is an important functions.
MiFID controls all tradable financial products with the exception of certain foreign exchange trades like commodity and derivatives such as freight, climate and carbon derivatives. Firms controlled by MiFID will be authorized and regulated were they have their registered office. Once a firm has been authorized, it will be able to use the MiFID passport to provide services to customers in other EU member states.
MiFID has a set of rules well defined. They require firms to categorize clients as eligible counterparties, professional clients and retail clients. Also MiFID require that the information need to be capture when accepting client’s orders. MiFID has to ensure that always client is put on first place.