Clear DefinitionsMiFID II (Markets in Financial Instruments Directive)
1 min read
Pronunciation
[my-fid two]
Analogy
Like a comprehensive rulebook for how stock exchanges and brokers must operate to protect investors and ensure fair trading.
Definition
An EU regulatory framework that governs financial markets, trading venues, and investment services, aiming to increase transparency, investor protection, and market integrity.
Key Points Intro
MiFID II sets strict requirements on transparency, reporting, and governance for trading and investment services in Europe.
Key Points
Pre- and post-trade transparency: Publication of prices and volumes.
Transaction reporting: Detailed trade-level data to regulators.
Best execution: Firms must seek the best outcome for clients.
Organizational requirements: Governance, conflicts of interest, record-keeping.
Example
A crypto-asset trading platform operating in the EU must report all client trades to the relevant regulator under MiFID II standards.
Technical Deep Dive
Firms implement MiFID II reporting via the Approved Reporting Mechanism (ARM) using FIX or XML. Systems capture RFQ, order, execution, and client data, enrich with MIC and LEI codes, and submit within one business day.
Caveat
Compliance imposes significant data and operational overhead.
MiFID II (Markets in Financial Instruments Directive) - Related Articles
No related articles for this term.