Markets in Financial Instruments Directive – MiFID

This excellent series of articles was written by Bob Penn, an associate in the Regulatory Team of Allen & Overy LLP. He advises on a variety of financial services matters, including bank regulation, regulation of the securities and derivatives markets, exchanges, trading systems and other market infrastructure.

Part 1 – Markets In Financial Instruments Directive (MIFID): An Introduction

MiFID, which will recast the regulatory environment for European financial services firms and markets, is beginning to occupy a prominent place in the thoughts of senior management and compliance functions of a number of financial services providers across Europe. That it should do so is not a surprise: that more providers are not devoting significant resources to it is. This is the first of a six-part series on MiFID which explores why this is the case.

This article sets out the background to MiFID and its implementation, and summarises areas of impact. Future articles will discuss in more detail particular areas of interest, including the impact of the changes to the scope of the Directive and passporting, governance, systems and controls, conflicts of interest, best execution, suitability and appropriateness, and market infrastructure.

Part 2 – Markets In Financial Instruments Directive (’MiFID’): Changes To The Scope Of Regulation

This is the second in a series of six articles on the Markets in Financial Instruments Directive (’MiFID’). It examines changes to the scope of regulation across Europe, covering in particular the extensions of the EEA regulatory framework to include the operation of multilateral trading facilities, activities and services relating to a wide range of derivatives, and the inclusion of investment advice in the core MiFID services.

Part 3 – Markets In Financial Instruments Directive (’MiFID’): Organisational Arrangements And Conflicts Of Interest

This is the third of a series of six articles on the Markets in Financial Instruments Directive (’MiFID’). This part discusses organisational arrangements, including general organisational requirements, including systems and controls and outsourcing, and conflicts of interests.

Part 4 – Markets in Financial Instruments Directive (’MiFID’): conduct of business

This is the fourth in the series of six articles on the Market in Financial Instruments Directive (’MiFID’). This part discusses conduct of business requirements other than best execution (which will be discussed in the next article), including country of origin regulation, investment services and investment activities, client categorisation, disclosure to clients and order handling.

Part 5 – Markets in Financial Instruments Directive (’MiFID’): best execution

This is the fifth in the series of six articles on MiFID. This part discusses best execution. Under MiFID, investment firms which execute client orders (whether as principal or as agent) in relation to financial instruments will need to comply with detailed new best execution requirements. In addition, firms which undertake portfolio management or receive and transmit orders on behalf of clients in relation to financial instruments will be subject to analogous requirements.

Part 6 – MiFID and market infrastructure: convergence of exchange and broker regulation

This is the sixth article in a series on MiFID. It examines the new European regulatory framework regime as it applies to market infrastructure, including the convergence between the regulation of exchanges and multilateral trading facilities, and the rules on pre- and post-transaction transparency applying to investment firms.