What is MiFID? Implications for Systematic Internalisers.

MiFID is "Markets in Financial Instruments Directive". It has 2 goals:

• foster competition and "level playing field" for Europe's trading venues
• provide protection for investors and consumers of financial services

It replaced the Investment Services Directive on 1 November 2007. An interesting aspect of MiFID is its rules for Systematic Internalisers (SIs); firms that execute orders from its clients against its own book, or against orders from other clients. MiFID treats these firms as virtual exchanges, subject to the same transparency requirements (pre-trade and post-trade).