The Markets in Financial Instruments Directive (MiFID)[1] is considered to be one of the most important and wide-ranging pieces of EU financial services legislation in recent years and it is a major part of the EU’s Financial Services Action Plan (FSAP) - which seeks to promote a single EU market for wholesale and retail transactions in financial instruments. Not only will MiFID have a big

impact on how investment firms carry out their business in Europe, it will also impact how they deal

with their outsourcing arrangements.

MiFID was originally adopted at an EU level in April 2004 by the European Commission. MiFID was implemented into UK legislation through amendments to the Financial Services and Markets Act 2000 and the regulations under it, along with changes made by the Financial Services Authority

(FSA) to the rules and guidance in the FSA Handbook. MiFID came into force in the UK on 1 November 2007 and it replaces the existing Investment Services Directive.[3]

This article concentrates on MiFID from an outsourcing perspective and explains the practical steps that an affected investment firm can take to achieve compliance.