Law · European Union

MiFID II: Directive 2014/65/EU on markets in financial instruments

Directive 2014/65/EU, known as MiFID II, is the EU's core law for investment services, trading venues and investor protection across the EEA. It licenses investment firms, a category that covers neo-brokers, robo-advisors and algorithmic trading desks, plus market operators, alternative venues such as MTFs and OTFs, third-country branches, SME growth markets and tied agents.

Last verified 2026-09-24Markdown · Data (CC BY 4.0)
Directive 2014/65/EU on markets in financial instruments: lawMiFID §

At a glance

Official titleDirective 2014/65/EU of the European Parliament and of the Council of 15 May 2014 on markets in financial instruments and amending Directive 2002/92/EC and Directive 2011/61/EU1
English titleDirective 2014/65/EU on markets in financial instruments
CitationDirective 2014/65/EU
JurisdictionEuropean Union (applies in every EU/EEA state)
Typedirective
Adopted2014-05-15
In force from2014-07-02
Statusin force

Full text

Official full text: Directive 2014/65/EU on markets in financial instruments (PDF, en)1 · 1,358 KB · file checked 2026-09-24 · consolidated version of 2026-06-06

Official page: eur-lex.europa.eu1 · archived copy

Summary

Directive 2014/65/EU, MiFID II, lays down the EU framework for investment services, trading venues and market infrastructure. It reaches investment firms, market operators, credit institutions that provide investment services, and third-country firms opening a branch in the Union. The directive creates five authorisations and registrations: an investment firm authorisation (covering reception and transmission, execution, dealing on own account, portfolio management, advice, underwriting, placing, MTFs and OTFs), a market operator authorisation to run a regulated market, authorisation of a third-country branch, registration as an SME growth market, and registration as a tied agent. Firms need initial capital under Directive (EU) 2019/2034, sound governance, fit-and-proper vetting of management, and approval before a qualifying holding crosses 20%, 30% or 50%. Membership in an investor compensation scheme is mandatory. Authorised firms must safeguard client assets, control algorithmic trading risk, apply product governance, run suitability and appropriateness checks, seek best execution and disclose costs plainly. Passporting lets them offer services and open branches anywhere in the internal market without further authorisation.

Summary written by the Atlas from the official text; the law itself prevails.

Main articles

  • Art. 1: Scope: investment firms, market operators, third-country branches and credit institutions carrying out investment services and activities in the Union.
  • Art. 3: Member States may exempt firms that only give advice or transmit orders, so long as they never hold client money or securities.
  • Art. 5: No investment service or activity on a professional basis without prior authorisation from the home state's competent authority.
  • Art. 6: An authorisation lists the specific investment and ancillary services it covers. A firm cannot be authorised for ancillary services alone, and once granted the authorisation holds across the Union.
  • Art. 7: The authority reviews the firm's programme of operations and internal arrangements, then has to decide within six months of a complete file.
  • Art. 8: Authorisation can be withdrawn for not being used within twelve months, voluntary surrender, obtaining it by fraud, or serious and repeated breaches.
  • Art. 9: The management body needs good repute, adequate knowledge and skill, enough time for the role, and a properly diverse composition.
  • Art. 10: Shareholders with a qualifying holding must be disclosed and cleared by the regulator, which has to refuse if their presence would put sound management at risk.
  • Art. 11: Buying or selling a stake that reaches or crosses the 20%, 30% or 50% capital or voting threshold needs prior written notice and approval.
  • Art. 14: No authorisation without membership in an investor compensation scheme recognised under Directive 97/9/EC.
  • Art. 15: Initial capital must meet Article 9 of Directive (EU) 2019/2034, scaled to the activities the firm actually carries out.
  • Art. 16: Sets the organisational baseline: internal controls, risk management, a compliance function, complaint handling, conflict prevention, safeguarding of client assets and product governance.
  • Art. 17: Firms running algorithmic trading need resilient, adequately capacious systems with pre-trade and post-trade risk parameters, plus circuit breakers.
  • Art. 23: Firms must be organised to spot, stop and manage conflicts of interest that could work against a client.
  • Art. 24: The firm acts honestly, fairly and professionally in the client's best interest: marketing that is not misleading, pricing that is not bundled, and full disclosure of fees.
  • Art. 25: Portfolio management and advice need a suitability assessment. Other services need only an appropriateness test of the client's knowledge and experience.
  • Art. 27: Best execution: the firm takes all sufficient steps to get the best result on price, cost, speed and likelihood of execution.
  • Art. 28: Client orders are handled promptly, fairly and without favouring the firm's own book over a client's, or one client over another.
  • Art. 29: A tied agent must be publicly registered. The appointing firm answers for it fully, without conditions.
  • Art. 34: Passporting: a firm authorised at home can offer investment and ancillary services across every Member State, and a host state cannot add its own restrictions.
  • Art. 35: The same passport covers opening a branch or appointing a tied agent in another Member State, on notification.
  • Art. 39: A Member State can insist that a third-country firm serving retail clients, or professional clients who opt in, open an authorised branch on its territory.
  • Art. 44: Only a system or operator meeting the Title III organisational and governance rules can be authorised as a regulated market.
  • Art. 69: Competent authorities get wide supervisory and investigative powers: access to data, the power to suspend orders, ban transactions, and refer matters to court.
  • Art. 70: Member States must have administrative sanctions on the books, from public notice of the breach and withdrawal of authorisation to management bans and fines that actually sting.

Licences it governs

Regulators that apply it

Upcoming changes

  • 2026-12-05: Directive 2001/34/EC is repealed pursuant to Article 2 of Directive (EU) 2024/2811 (Listing Act), completing the modernisation of EU listing and admission rules across trading venues.2
  • Pending legislative adoption: Retail Investment Package (COM(2023) 279), proposing amendments to Directive 2014/65/EU to enhance retail investor protections, strengthen inducement bans for execution-only sales, and modernize client categorization and suitability assessments.3
Last verified 2026-09-24Author Danil Marmysh, Founder & CEO, ProtegraReviewed by Anastasia Sidorenkova, Head of Licensing, ProtegraReport an errorReference information, not legal advice.

Sources

  1. EUR-Lex: CELEX 32014L0065 · retrieved 2026-09-24
  2. EUR-Lex: CELEX 32024L2811 · retrieved 2026-09-24
  3. EUR-Lex: CELEX 52023PC0279 · retrieved 2026-09-24

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