As the FSA reports, the original MARKETS IN FINANCIAL INSTRUMENTS DIRECTIVE-MiFID (Encyclopedia), implemented in November 2007, introduced competition into the EU trading landscape and provided a ‘passport’ for trading venues and investment firms to operate throughout Europe on the basis of authorisation in their home Member State (MS). It also introduced various investor protection measures.

The European Commission has now put forward proposals for a new Directive and a new proposed Regulation (MiFIR), to build on this framework. The new proposals are designed to take into account developments in the trading environment since the implementation of MiFID in 2007, including advances in technology and gaps in transparency to investors and regulators. It is also a response to the financial crisis.

The proposals have been submitted to the European Parliament (EP) and the Council of the European Union for discussion. A final agreement between the legislative bodies on the Level I proposals is expected by the end of 2012. Implementation of the new measures is not expected until at least 2015.