The Markets in Financial Instruments Directive II, also known as MiFID II, is a law established by the European Parliament with the purpose of standardizing the regulation for investment services across all members of the European economic area. It is widely considered to be one of the most important regulations introduced by the European Union since the onset of the financial crisis in 2008.

The directive aims to foster harmonized functioning of financial markets, encourage competition between new categories of trading venues, and enhance investor protection.

What is the main purpose of MiFID II?

  • Making European markets safer, significantly more transparent, and highly efficient;
  • Restoring investor confidence that was shaken by the financial crisis;
  • Moving a significant part of over-the-counter trading on to regulated trading venues;
  • Creating a unified financial market across the European Union.

What are some of its implications?

  • Transparency of policies and procedures for clients;
  • Increased threshold limits and controls around dark pool trading;
  • Increased transparency obligations on transaction and trade reporting;
  • Obligation to record phone and electronic communications;
  • Product governance, including monitoring of product performances;
  • Inclusion of the target market, product, and client characteristics in the sales approach;
  • Cost and performance transparency.

MiFID II regulates the registration of calls in the securities trade. The legislation requires the recording and comprehensive protection of calls regardless of the channel: telephone, video call, chat or email.

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