What does MiFID mean in Stock Exchange?

Markets in Financial Instruments Directive

The Markets in Financial Instruments Directive 2004/39/EC 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 main objectives of the Directive are to increase competition and consumer protection in investment services. As of the effective date, 1 November 2007, it replaced the Investment Services Directive. 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 but introduced the concept of 'maximum harmonization' which places more emphasis on home state supervision.

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