The Markets in Financial Instruments Directive (MiFID II) came into effect on 3 January 2018 across the EU and UK. Its introduction marked one of the most comprehensive financial regulations since the 2008 financial crisis. This new transaction reporting regime replaced the initial MiFID introduced in 2007 and was viewed as far more thorough yet complex.

MiFID II's primary objective is to provide regulatory authorities with comprehensive data on financial transactions related to instruments listed on trading venues and those executed with an SI. For EU MiFIR, this applies to EU trading venues (RM, MTF, OTFs) and SIs whilst for the UK equivalent, it applies to instruments traded on UK, EU and Gibraltar trading venues and SIs. This data enables regulators to conduct market surveillance, monitor systemic risk, and ultimately protect investors.

The most commonly-referenced section of MiFIR is Article 26(1) that clearly outlines the requirement for reporting firms to submit complete and accurate details of reportable transactions by the next business day.

European Securities and Markets Authority (ESMA), is responsible for the regulation whilst it’s counterpart, the Financial Conduct Authority (FCA), supervises the regime in the UK post-Brexit. Since 2021, there have been a number of consultation papers released by the two regulators regarding revisions to MiFID II that points towards a divergence between the two regulators.

ESMA has been first of the two to provide concrete changes and on 27 March 2024 released a formal Public Statement announcing a move to formally apply the findings of their MiFID review with a series of substantive changes.

This is a clear indication that MiFID II and its successor will continue to pose challenges for firms.