What is MiFID and what does it mean for you?

MiFID stands for 'Markets in Financial Instruments Directive'. The purpose of this European directive is two-fold:

  • To increase competition within European Union financial markets;
  • To provide investors with improved protection.

Increase competition within EU financial markets

  • Under MiFID, all banks, stockbrokers and other intermediaries trading in financial instruments in all European Union countries are subject to the same rules.
  • 'Financial instruments' refers primarily to shares, bonds, investment funds and derivatives (such as options and futures).
  • Savings accounts and term accounts are not covered by MiFID.
  • Belgian legislators have decided to extend certain MiFID rules to cover both financial and non-financial insurance providers as of 30/04/2014 (Twin Peaks Law).

Provide investors with improved protection

MiFID aims to provide investors with improved protection, to which end it uses the following tools:


MiFID requires the banks to classify all their clients and to notify those clients as to which investor category they belong to.


MiFID defines three categories of investor:

  • Retail clients
  • Professional clients
  • Eligible counterparties.


The bar is set exceptionally high for classification as a professional client (chiefly government agencies, institutional investors and large corporations) and so the majority of our clients will be categorised as retail clients. That's actually great news for investors, as it is precisely this category of client that enjoys the highest possible level of protection.

The bank is likewise required to take all reasonable measures to ensure that clients' orders are executed in a way that achieves the best possible result. The ‘best result' in the case of retail clients is chiefly determined by price and execution costs, both of which should be as low as possible.

The cost price of the order is therefore important, but also factors like the speed and likelihood of execution, and market liquidity.

The bank draws up an order execution policy for all this.

Each transaction must be executed in accordance with that policy. This does not mean, however, that the best result will always be achieved for each individual transaction.


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 MiFID means investment advice that's even more solid