MiFID and MiFIR Review – review of key securities market rules

The Markets in Financial Instruments Directive (MiFID) and the Markets in Financial Instruments Regulation (MiFIR), hereafter “MiFID II”, constitute one of the most important cornerstones of the regulation of the EU securities market. The regulatory framework entered into force on 3 January 2018 and contains, among other things, organizational requirements and conduct of business rules for investment institutions when providing diverse types of investment services and activities as well as rules regarding market structure.

In November 2021, the Commission presented proposal for amendments to MiFID II/MiFIR which included the introduction of a so-called consolidated tape for the publication of aggregated trading information (see further under Capital Markets Union.) In addition, amendments are proposed as regards the rules on transparency, trading obligation for shares, volume cap and reporting of best order execution. Also, a ban on payment for order flow was included in the proposal.

In June 2023, the council and parliament reached a provisionary agreement on MiFID II/MiFIR Review. The final adoption of the amended legal acts will take place in the autumn 2023. In parallel work is ongoing to draft extensive detailed rules on level 2.

Investor protection regulation and EU strategy for retail investors

On 24 May 2023, the Commission presented a proposal for a new EU strategy for retail investors (RIS). RIS consists of a so-called omnibus directive with proposals for amendments to MiFID II, IDD, UCITS and AIFMD as well as amendments to PRIIPs.

A stated aim of the horizontal review in investor protection is to increase retail investors engagement on the capital market. The focus of the review is on the provisions relating to client disclosure, inducements, and advice. The Commission has also proposed new provisions in the context of product governance that relate to value for money, marketing rules as well as requirements on how advisors shall act in the client’s best interest.
The Commission’s proposal is currently dealt with by the council and parliament separately. It is uncertain how long time this will take and when trialogues can start. The timetable may also be affected by elections to EU-parliament and new Commission in 2024.