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 the following:

• 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 financial markets:

• Maximum possible protection of investors throughout Europe.
• Increase of competition because investors will be highly informed.
• All financial groups will be able to carry out orders in all European Union member states.
• European financial markets will be more transparent and efficient.

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 categories :
  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.
  Eligible 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)
• Bonds
• Mutual Funds
• Synthetic Swaps
• Sale and purchase of financial instruments (Greek treasury bills, Greek state bonds and Corporate Bonds)
• Currency trading
• Οutright forwards
• FX Swap
• Caps
• Fx Options
• 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 press here

Best Execution Policy

To see Best Execution Policy for client orders press here

To see the Directive 2004/39/EC of the European Parliament press here

To see Client classification letter press here

To see Professional classification letter press here