The Markets in Financial Instruments Directive came into force across the European Economic Area on Nov. 1 2007. Although most member states have taken many of the steps necessary for implementation of MiFID, further work needs to be done before all relevant legislation and rules are

in place. Understandably, therefore, firms are still getting to grips with the new rules and how they will impact their business.

Two aspects of the rules that could have a particular significance for firms providing investment services in relation to derivatives or structured securities embedding derivatives are the new appropriateness obligation and the best execution rules. Both are considered in turn in this Learning Curve.

Appropriateness & Best Execution