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Investment services and regulated markets - Markets in financial instruments directive (MiFID)

EU laws aimed at making financial markets more efficient, resilient and transparent, and at strengthening the protection of investors.

Facing the energy crisis in the EU

As highlighted in the 2022 State of the Union address, energy companies nowadays are facing severe problems with liquidity in electricity futures markets, which is putting the proper functioning of our energy system at risk. In this context, the Commission has proposed to the Council to adopt under Article 122 of the TFEU an intra-day price spike collar, a volatility management mechanism.


EU rules on investment services

The EU has established a comprehensive set of rules on investment services and activities with the aim to promote financial markets that are

  • fair
  • transparent
  • efficient
  • integrated

The first set of rules adopted by the EU helped to increase the competitiveness of financial markets by creating a single market for investment services and activities. They also ensured a high degree of harmonised protection for investors in financial instruments, such as shares, bonds or derivatives.

However, after the 2008 financial crisis it became clear that a more robust regulatory framework was needed to

  • further strengthen investor protection
  • address the development of new trading platforms and activities

Markets in financial instruments directive - MiFID

MiFID is the markets in financial instruments directive (Directive 2004/39/EC). In force from 31 January 2007 to 2 January 2018, it is a cornerstone of the EU's regulation of financial markets. It governed

  • provision of investment services in financial instruments by banks and investment firms
  • operation of traditional stock exchanges and alternative trading venues

While MiFID created competition between these services and brought more choice and lower prices for investors, shortcomings were exposed in the wake of the financial crisis.


In June 2014, the European Commission adopted new rules revising the MiFID framework. These consist of a directive (MiFID II) and a regulation (MiFIR).

MiFID II aims to reinforce the rules on securities markets by

  • ensuring that organised trading takes place on regulated platforms
  • introducing rules on algorithmic and high frequency trading
  • improving the transparency and oversight of financial markets – including derivatives markets - and addressing some shortcomings in commodity derivatives markets
  • enhancing investor protection and improving conduct of business rules as well as conditions for competition in the trading and clearing of financial instruments

The revised MiFID rules also strengthen the protection of investors by introducing requirements on the organisation and conduct of actors in these markets.

MiFIR sets out requirements on

  • disclosure of data on trading activity to the public
  • disclosure of transaction data to regulators and supervisors
  • mandatory trading of derivatives on organised venues
  • removal of barriers between trading venues and providers of clearing services to ensure more competition
  • specific supervisory actions regarding financial instruments and positions in derivatives

MiFID II and MiFIR became applicable as from 3 January 2018.

Capital markets recovery package

In order to reduce the administrative burden that experienced investors face in their business-to-business relationships, targeted amendments have been introduced to MiFID II requirements. The COVID crisis makes it even more important to alleviate unnecessary burdens and provide opportunities to nascent markets. Therefore, requirements have been recalibrated to ensure that there is a high level of transparency towards the client. The MiFID rules affecting energy derivatives markets have also been addressed. This is intended to help the development of euro-denominated energy markets – important for the international role of the euro – as well as allow European companies to cover their risks, while safeguarding the integrity of commodity markets, especially for agricultural products.

More on the capital markets recovery package

MiFIR review

The MiFIR review will be the first reform of European trading infrastructure since the implementation of MiFID II in January 2018. It aims to improve the functioning of our capital markets by addressing the fragmentation of trading data across over 400 venues across the EU. MiFID iterations led to increased competition among venues but also to more fragmented trading, thereby introducing liquidity and trade execution risk for all capital market participants. While we do not propose to reduce competition in trading venues, the core objective of the MiFIR review is to create a consolidated view of prices and liquidity available on all of these venues, thereby enhancing the useful effect of competition.

This should strengthen our competitive ecosystem by allowing the entire range of investors, from professional brokers to retail investors, to trade wherever they get the best price and highest guarantee of successful completion of their transactions. The objective with this new instrument is to make the European Union the main and most efficient place to trade in all euro-denominated financial asset classes, primarily shares, ETFs, bonds and derivatives.

More on the MiFIR review


  • Study
  • Directorate-General for Financial Stability, Financial Services and Capital Markets Union

Study on the creation of an EU consolidated tape

This study analyses the demand for consolidated European financial market data in equities and bonds.

Glossary: Useful terms linked to markets in financial instruments
(59.35 KB - PDF)