The Markets in Financial Instruments Directive 2004/39/EC (“MiFID” or “MiFID I”) was previously known as the Investment Service Directive and applies to all Investment Firms in the European Union (including, brokers, retail banks, hedge funds, asset managers, private banks, and pension and fund managers).

MiFID was incorporated into Greek legislation through Law 3606/2007 and came into force on November 1, 2007. MiFID set out a new regulatory framework for investment services, aiming at enhanced investor protection, increased transparency and more efficient operation of financial markets, to the benefit of investors.


MiFID primarily focuses on:

1. Encouraging competition through:
(a) Freedom to provide investment services and activities, allowing investment firms to provide financial services throughout EU on the basis of home country supervision.
(b) Bringing the operation of (i) organized markets, (ii) alternative trading venues (such as multilateral Trading Facilities MTFs), and (iii) off exchange trading (Systematic Internalisers) into a regulated environment.
(c) Simplifying listing process of securities on all exchanges and MTFs.

2.Offering Investors a high level of protection.

3. Offering market transparency

MiFID provides the harmonization needed for the provision of financial services among investment firms and the various trading venues in EU.

MiFID introduces the following new concepts which have a great impact on clients:

(a) Categorization of clients, according to their knowledge and experience on every financial instrument in order to identify the level of protection required, in the following categories:

– Retail
– Professional and
– Eligible counterparties.


(b) Due diligence obligation:

– Suitability for the provision of investment advice.
– Appropriateness for the provision of execution only services in complex financial instruments


(c) Identification and management of conflict of interests:

– between a firm or its employees and clients or
– among clients.


(d) Best execution policy aiming to:

– Obtain consistently the best possible result for the client
– Put in place execution arrangements, and
– Provide clients with appropriate information on the execution policy and obtain consent.


(e) Disclosure of inducement in relation to the provision of an investment or ancillary service to a client, related to payments to or from a third party and introduction of new and stricter rules aiming to increase :

– Investors’ protection and
– Transparency.