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Summaries of EU Legislation

Markets in financial instruments regulation (MiFIR)

 

SUMMARY OF:

Regulation (EU) No 600/2014 on markets in financial instruments

WHAT IS THE AIM OF THE REGULATION?

It updates earlier European Union (EU) legislation on markets in financial instruments* to ensure that these:

  • are more transparent;
  • work more efficiently; and
  • provide investors with more protection.

It covers:

  • disclosure of trade data to the public;
  • reporting of transactions to the relevant authorities;
  • trading of derivatives* on organised venues;
  • non-discriminatory access to clearing* and trading in benchmarks*;
  • powers for national authorities, the European Securities and Markets Authority (ESMA) and the European Banking Authority;
  • investment services and activities by non-EU firms; and
  • authorisation and supervision of data reporting service providers (a change introduced by amending Regulation (EU) 2019/2175, see below).

KEY POINTS

Scope

The legislation applies to:

  • investment firms and credit institutions such as banks;
  • insurance, assurance and reinsurance companies or alternative investment funds (known as ‘financial counterparties’);
  • non-EU firms with the necessary authorisation from the European Commission.

Transparency

Transparency rules:

  • aim to ensure trading takes place on organised and appropriately regulated trading venues* ;
  • require market operators and investment firms that operate a trading venue to make public, both before and after trading (the latter in as close to real time as technically possible), information such as bid and offer prices and the volumes involved;
  • allow for limited exemptions from the above requirement;
  • state the information must be made available to the public on a reasonable commercial basis, in a non-discriminatory way and for free 15 minutes after publication;
  • set out specific requirements for systematic internalisers* and investment firms that trade over the counter without the supervision of an exchange.

Transaction rules

Transaction rules require the following.

  • Investment firms must:
    • keep all relevant data on orders and transactions carried out for themselves or for a client for 5 years;
    • report complete and accurate details of all transactions to the relevant national authority as quickly as possible and no later than close of the following working day.
  • Trading venues must keep all data on financial instruments advertised through their systems for 5 years.

Trading in derivatives must adhere to the following rules.

  • It must take place in:
    • a regulated market;
    • a multilateral trading facility* ;
    • an organised trading facility*; or
    • a non-EU trading facility that the Commission has authorised.
  • It must be cleared by a central counterparty* as quickly as technologically possible.

Central counterparties must clear financial transactions in a non-discriminatory and transparent manner.

ESMA:

  • drafts certain technical standards, notably for derivatives and central counterparties;
  • monitors the financial instruments marketed, distributed or sold in the EU.

ESMA, the European Banking Authority and national authorities work closely together and have the power to temporarily ban or restrict the use of financial instruments considered a threat to investors or the financial system.

Amending legislation

Amending Regulation (EU) 2019/2175 enhances the powers, governance and funding of all the European supervisory authorities following a review undertaken in 2017, which concluded that the supervision of certain activities and entities with particular importance for the EU as a whole, or with a significant degree of cross-border business, should be carried out by the European supervisory authorities instead of national authorities. More specifically, with regard to Regulation (EU) No 600/2014, it achieves the following.

  • It adds the authorisation and supervision of data reporting service providers to the scope of the original regulation, together with direct data-gathering powers for the purposes of reporting and transparency calculations.
  • It adds three different types of data reporting service providers subject to prior authorisation by ESMA to the definitions in the regulation:
    • approved publication arrangement*;
    • consolidated tape provider*; and
    • approved reporting mechanism*.
  • It empowers ESMA to request information it requires for its supervisory tasks.
  • It establishes ESMA as the supervisor of data reporting service providers.
  • It defines the powers and competences ESMA should have in exercising its role as competent authority.
  • It imposes reporting requirements for the Commission on the functioning of the consolidated tape.
  • It specifies the transfer of powers from national authorities to ESMA.

With a view to strengthening the digital operational resilience of the EU financial sector, amending Regulation (EU) 2022/2554 (see summary), the EU’s Digital Operational Resilience Act (known as DORA), sets requirements for the resilience of network and information systems of firms operating in the financial sector, and subjects critical third parties that provide ICT-related services to them to an oversight framework. It creates a regulatory framework on digital operational resilience whereby all firms operating in the financial sector need to make sure they can withstand, respond to and recover from all types of ICT-related disruptions and threats.

Implementing and delegated acts

The Commission has adopted a series of implementing and delegated acts.

Implementing acts

  • Decision (EU) 2017/2238 on the equivalence of the legal and supervisory framework applicable to designated contract markets and swap execution facilities in the United States.
  • Decision (EU) 2019/541 on the equivalence of the legal and supervisory framework applicable to approved exchanges and recognised market operators in Singapore, as amended by Decision (EU) 2020/2127.

Delegated acts

  • Regulatory technical standards
    • Regulation (EU) 2016/2020 on the criteria for determining whether derivatives subject to the clearing obligation should be subject to the trading obligation.
    • Regulation (EU) 2016/2021 on access in respect of benchmarks.
    • Regulation (EU) 2016/2022 on the information for registration of non-EU country firms and the format of information to be provided to the clients.
    • Regulation (EU) 2017/572 on the specification of the offering of pre- and post-trade data and the level of disaggregation of data.
    • Regulation (EU) 2017/583, as amended by Regulations (EU) 2021/529 and (EU) 2022/629, on the transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives.
    • Regulation (EU) 2017/590 on the reporting of transactions to competent authorities.
    • Regulation (EU) 2017/582 on the obligation to clear derivatives traded on regulated markets and timing of acceptance for clearing.
    • Regulation (EU) 2017/579 on the direct, substantial and foreseeable effect of derivative contracts within the EU and the prevention of the evasion of rules and obligations.
    • Regulation (EU) 2017/587, as amended by Regulation (EU) 2019/442, on the transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser.
    • Regulation (EU) 2017/577 on the volume cap mechanism and the provision of information for the purposes of transparency and other calculations.
    • Regulation (EU) 2017/580 on the maintenance of relevant data relating to orders in financial instruments.
    • Regulation (EU) 2017/585 on the data standards and formats for financial instrument reference data and technical measures in relation to arrangements to be made by ESMA and competent authorities.
    • Regulation (EU) 2017/581 on the clearing access in respect of trading venues and central counterparties.
    • Regulation (EU) 2017/2154 on the indirect clearing arrangements.
    • Regulation (EU) 2017/2417, as amended by Regulation (EU) 2022/749, on the trading obligation for certain derivatives.
    • Regulation (EU) 2017/567 on definitions, transparency, portfolio compression and supervisory measures on product intervention and positions.
    • Regulation (EU) 2022/466 on criteria for derogation of the principle that approved publication arrangements and approved reporting mechanisms are supervised by ESMA.
    • Regulation (EU) 2022/803 on rules of procedure for the exercise of the power to impose fines or periodic penalty payments by ESMA regarding data reporting service providers.
    • Regulation (EU) 2022/930 specifying fees relating to the supervision by ESMA of data reporting service providers.
  • Other aspects
    • Regulation (EU) 2017/1799, as amended by Regulation (EU) 2019/1000, on the exemption of certain non-EU countries’ central banks in their performance of monetary, foreign exchange and financial stability policies from pre- and post-trade transparency requirements.
    • Regulation (EU) 2017/2194 on package orders.

FROM WHEN DOES THE REGULATION APPLY?

  • Regulation (EU) No 600/2014 has applied since 3 January 2018.
  • Changes introduced by amending Regulation (EU) 2019/2175 have applied since 1 January 2022.
  • Changes introduced by amending Regulation (EU) 2022/2554 apply from 17 January 2025.

BACKGROUND

KEY TERMS

Financial instrument. An asset, evidence of ownership of an asset, or a contractual agreement between two parties to receive or deliver another financial instrument.
Derivative. A financial instrument the value of which is based on the change in value of an underlying asset.
Clearing. The process used to manage the risk of open positions by checking that securities, cash or both are available.
Benchmarks. Any publicly available rate, index or figure determined by a formula or value of underlying assets.
Trading venue. An official venue, such as multilateral trading facilities, organised trading facilities or regulated markets, where securities are exchanged.
Systematic internaliser. An investment firm that deals on its own account outside a regulated market on an organised, frequent, systematic and substantial basis.
Multilateral trading facility. A multilateral system, operated by an investment firm or a market operator, that brings together multiple third-party buying and selling interests in financial instruments – in the system and in accordance with non-discretionary rules – in a way that results in a contract in accordance with Title II of MiFID II.
Organised trading facility. A multilateral system that is not a regulated market or a multilateral trading facility and in which multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives are able to interact in the system in a way that results in a contract in accordance with Title II of MiFID II.
Central counterparty. An entity acting as intermediary between trading counterparties and absorbing some of the settlement risk.
Approved publication arrangement. A system that requires firms executing transactions to publish trade reports through a body that ensures the timely and secure consolidation and publication of such data.
Consolidated tape provider. A person authorised under MiFID II to provide the service of collecting trade reports for financial instruments from regulated markets, multilateral trading facilities, organised trading facilities and approved publication arrangements, and consolidating them into a continuous electronic live data stream providing price and volume data per financial instrument.
Approved reporting mechanism. A platform that reports transactions on behalf of firms. This can also be done via the multilateral trading facility or regulated market on which the transaction was performed.

MAIN DOCUMENT

Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Regulation (EU) No 648/2012 (OJ L 173, 12.6.2014, pp. 84–148).

Successive amendments to Regulation (EU) No 600/2014 have been incorporated into the original text. This consolidated version is of documentary value only.

RELATED DOCUMENTS

Regulation (EU) 2022/2554 of the European Parliament and of the Council of 14 December 2022 on digital operational resilience for the financial sector and amending Regulations (EC) No 1060/2009, (EU) No 648/2012, (EU) No 600/2014, (EU) No 909/2014 and (EU) 2016/1011 (OJ L 333, 27.12.2022, pp. 1–79).

Commission Delegated Regulation (EU) 2022/930 of 10 March 2022 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council by specifying fees relating to the supervision by the European Securities Markets Authority of data reporting service providers (OJ L 162, 17.6.2022, pp. 1–6).

Commission Delegated Regulation (EU) 2022/803 of 16 February 2022 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council by specifying rules of procedure for the exercise of the power to impose fines or periodic penalty payments by the European Securities Markets Authority regarding data reporting service providers (OJ L 145, 24.5.2022, pp. 1–6).

Commission Delegated Regulation (EU) 2022/466 of 17 December 2021 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council by specifying criteria for derogation of the principle that approved publication arrangements and approved reporting mechanisms are supervised by the European Securities Markets Authority (OJ L 96, 24.3.2022, pp. 1–3).

Commission Implementing Decision (EU) 2019/541 of 1 April 2019 on the equivalence of the legal and supervisory framework applicable to approved exchanges and recognised market operators in Singapore in accordance with Regulation (EU) No 600/2014 of the European Parliament and of the Council (OJ L 93, 2.4.2019, pp. 18–24).

See consolidated version.

Commission Implementing Decision (EU) 2017/2238 of 5 December 2017 on the equivalence of the legal and supervisory framework applicable to designated contract markets and swap execution facilities in the United States of America in accordance with Regulation (EU) No 600/2014 of the European Parliament and of the Council (OJ L 320, 6.12.2017, pp. 11–17).

Commission Delegated Regulation (EU) 2017/2417 of 17 November 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the trading obligation for certain derivatives (OJ L 343, 22.12.2017, pp. 48–53).

See consolidated version.

Commission Delegated Regulation (EU) 2017/2194 of 14 August 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to package orders (OJ L 312, 28.11.2017, pp. 1–5).

Commission Delegated Regulation (EU) 2017/2154 of 22 September 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards on indirect clearing arrangements (OJ L 304, 21.11.2017, pp. 6–12).

Commission Delegated Regulation (EU) 2017/1799 of 12 June 2017 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council as regards the exemption of certain third countries central banks in their performance of monetary, foreign exchange and financial stability policies from pre- and post-trade transparency requirements (OJ L 259, 7.10.2017, pp. 11–13).

See consolidated version.

Commission Delegated Regulation (EU) 2017/567 of 18 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to definitions, transparency, portfolio compression and supervisory measures on product intervention and positions (OJ L 87, 31.3.2017, pp. 90–116).

Commission Delegated Regulation (EU) 2017/572 of 2 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards on the specification of the offering of pre-and post-trade data and the level of disaggregation of data (OJ L 87, 31.3.2017, pp. 142–144).

Commission Delegated Regulation (EU) 2017/577 of 13 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the volume cap mechanism and the provision of information for the purposes of transparency and other calculations (OJ L 87, 31.3.2017, pp. 174–182).

Commission Delegated Regulation (EU) 2017/579 of 13 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on the direct, substantial and foreseeable effect of derivative contracts within the Union and the prevention of the evasion of rules and obligations (OJ L 87, 31.3.2017, pp. 189–192).

Commission Delegated Regulation (EU) 2017/580 of 24 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the maintenance of relevant data relating to orders in financial instruments (OJ L 87, 31.3.2017, pp. 193–211).

Commission Delegated Regulation (EU) 2017/581 of 24 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards on clearing access in respect of trading venues and central counterparties (OJ L 87, 31.3.2017, pp. 212–223).

Commission Delegated Regulation (EU) 2017/582 of 29 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards specifying the obligation to clear derivatives traded on regulated markets and timing of acceptance for clearing (OJ L 87, 31.3.2017, pp. 224–228).

Commission Delegated Regulation (EU) 2017/583 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of bonds, structured finance products, emission allowances and derivatives (OJ L 87, 31.3.2017, pp. 229–349).

See consolidated version.

Commission Delegated Regulation (EU) 2017/585 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the data standards and formats for financial instrument reference data and technical measures in relation to arrangements to be made by the European Securities and Markets Authority and competent authorities (OJ L 87, 31.3.2017, pp. 368–381).

Commission Delegated Regulation (EU) 2017/587 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on transparency requirements for trading venues and investment firms in respect of shares, depositary receipts, exchange-traded funds, certificates and other similar financial instruments and on transaction execution obligations in respect of certain shares on a trading venue or by a systematic internaliser (OJ L 87, 31.3.2017, pp. 387–410).

See consolidated version.

Commission Delegated Regulation (EU) 2017/590 of 28 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards for the reporting of transactions to competent authorities (OJ L 87, 31.3.2017, pp. 449–478).

Commission Delegated Regulation (EU) 2016/2020 of 26 May 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on criteria for determining whether derivatives subject to the clearing obligation should be subject to the trading obligation (OJ L 313, 19.11.2016, pp. 2–5).

Commission Delegated Regulation (EU) 2016/2021 of 2 June 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council on markets in financial instruments with regard to regulatory technical standards on access in respect of benchmarks (OJ L 313, 19.11.2016, pp. 6–10).

Commission Delegated Regulation (EU) 2016/2022 of 14 July 2016 supplementing Regulation (EU) No 600/2014 of the European Parliament and of the Council with regard to regulatory technical standards concerning the information for registration of third-country firms and the format of information to be provided to the clients (OJ L 313, 19.11.2016, pp. 11–13).

Directive 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU (recast) (OJ L 173, 12.6.2014, pp. 349–496).

See consolidated version.

Regulation (EU) No 648/2012 of the European Parliament and of the Council of 4 July 2012 on OTC derivatives, central counterparties and trade repositories (OJ L 201, 27.7.2012, pp. 1–59).

See consolidated version.

last update 08.05.2023

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