MiFID stands for Markets in Financial Instruments Directive; or Directive on Markets in Financial Instruments. MiFID has been in force since 1 November 2007. It was drawn up by the European Union with the aim of improving investor protection, increasing competition and harmonising the European financial market.
This directive aims in particular to strengthen the rights of investors, and focuses on the provision of appropriate information, suitable recommendations and transparent pricing. The banks are instructed
  • to categorise their investors into private and professional clients
  • to execute transactions at the most favourable conditions possible for the client in terms of cost, speed and the probability of execution and settlement (best execution)
  • to ensure that the client receives suitable recommendations only and to minimise
  • resolve or disclose any conflicts of interest.
MiFID applies to the EU/EEA Member States and to the financial services providers registered there. Swiss financial services providers formalise the MiFID guidelines in practice.