Directive 2014/65/EU, known as MiFID 2 - Markets in Financial Instruments Directive 2 - is a legal act of the European Union. Alongside Regulation (EU) No 600/2014 it provides a legal framework for securities markets, investment intermediaries, and trading platforms. The directive provides a harmonised regulatory framework for investment services of the member states of the European Economic Area, the European Union member states plus Iceland, Liechtenstein, Norway and the United Kingdom. Its main objectives are to increase investor protection, and offer an equilibrium for market participants in investment and financial services. It updates Directive 2004/39/EC - MiFID 1.
MiFID 1 was the foundation of the European Commission's Financial Services Action Plan, whose laws changed how EU financial service markets operate. It is the most impactful piece of legislation introduced in the Lamfalussy process structured to accelerate the adoption of legislation based on a four-level approach.
MiFID 1 retained the principles of the EU passport introduced by Directive 93/22/EEC whilst introducing the practice of maximum harmonisation, which places more emphasis on home state regulations.
MiFID 2 has been adopted locally by the UK, and the UK regulator, the Financial Conduct Authority, which itself has taken a heavily influential role in shaping European financial regulations.
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