MiFID II, or the Markets in Financial Instruments Directive II, is a legislative framework instituted by the European Union (EU) to regulate financial markets in the bloc and improve protections for investors. It aims to standardize oversight among member nations, broaden the scope of regulations, and increase transparency in financial markets. MiFID II covers a wide range of financial instruments, including equities, commodities, debt instruments, futures and options, exchange-traded funds, and currencies. It also extends its requirements to more financial professionals within the EU, such as bankers, traders, fund managers, exchange officials, and brokers, as well as institutional and retail investors.
MiFID II came into force in January 2018 and brought about a comprehensive overhaul of the UK/European market structure and investor protection framework. It covers UK/EU investment firms, their branches, as well as UK/EU branches of non-UK/non-EU firms providing MiFID II services and activities to clients for in-scope financial instruments.
In summary, MiFID II is a significant piece of EU financial markets legislation that aims to create fair, efficient, and transparent financial markets while providing increased protections for investors.
