What is MiFID ?
MiFID (Market in
Financial Instruments Directive) is
the Directive 2004/39/EC of the European Parliament on financial instrument
markets, which will replace the existing Investment Services Directive, ISD -
1993), that has become a Greek state law (3606/2007). The modifications will be
In the future, investors will be able to have
information about the whole picture of the markets and not only of the stock
exchange where they trade. This will have as a result the transparency and
protection of the clients.
Financial groups shall be able, as long as they have an
operating license in at least one state, to be active in the European Union, on
the condition that they have received the appropriate approval by the competent
authorities in their countries. This will facilitate the cross-border
investment services within the European Union.
Modifications of shares’ transactions, as for example
the over –the- counter transactions between investment banks in order to
achieve lower transaction costs and increase liquidity.
When and where will MiFID be implemented
ΜiFID will be implemented as of November 1st 2007 in the EU
27 member-states, as well as in Iceland, Norway and Lichtenstein.
Why will it be implemented ?
MiFID’s implementation will have the following impact on
Maximum possible protection of investors throughout
Increase of competition because investors will be
All financial groups will be able to carry out orders
in all European Union member states.
European financial markets will be more transparent and
How will consumers be protected ?
Pre-contract information: Financial
institutions shall provide information to the investors, prior to the signing
of the contract, on the financial institutions themselves, on services provided
and financial instruments offered. This concerns the existing clients as well,
that will get an informative registered letter (see attached letter).
Best Execution Policy : The competent
bodies should carry out the investors’ orders ensuring the best possible terms
Suitability and Appropriateness questionnaire:
For this reason, adequate information shall be gathered, in order to
ensure that their products are appropriate (compatible) for every investor,
depending on his experience, financial standing and investment targets.
Suitability questionnaire : A chart
that audits -evaluates –the degree of suitability of investment services and
financial instruments is implemented. The investor’s knowledge, experience,
investment targets and financial status are mentioned.
Clients classification: Pursuant to
MiFID Directive, customers are classified based on criteria into three
Professional client is the customer who has
the knowledge, experience and expertise to make investment decisions and
evaluate investment risks.
Individual Client is the
client who is not classified as a professional, who gets a better protection,
and buys and sells products for his own account.
counterparties are companies, credit institutions, insurance
companies, UCITS (Undertakings for Collective Investments in Transferable
Securities), pension funds and their management companies.
Which financial instruments are encompassed in MiFID
Equities (Greek – Foreign)
Sale and purchase of financial instruments (Greek
treasury bills, Greek state bonds and Corporate Bonds)
Forward deposits in euros and foreign exchange
Capital guaranteed products
Forward deposits in combination with mutual funds
Pre-contract client updating on MiFID
To see Pre-contract information for MIFID investors
Best Execution Policy
To see Best Execution Policy for client orders
To see Conflict οf Interest Prevention & Management
To see Inducements Policy Annex
To see the Directive 2004/39/EC of the European Parliament
To see Client classification letter
To see Professional classification letter