The Markets in Financial Instruments Directive (Mifid) has brought significant changes to EU regulations in the securities and derivatives fields. As it seeks to create a single European market for investment firms, Mifid makes the EU investment passport more effective by limiting the extent to which host member states (jurisdictions other than the home member states) are allowed to regulate the cross-border activities of banks and other investment firms. At the same time, Mifid has increased the level of investor protection. Even though Mifid does not directly apply to non-EU/EEA investment firms, it will have an impact on all those who carry out cross-border business with EU customers or counterparties.
As well as strengthening and widening the EU passport, one of Mifid's central objectives was to dismantle the concentration rule, which allowed member states to demand that any share trading in their country happens on a regulated market. In...