MiFID
The EU regulation governing investment services and financial markets across member states, setting standards for broker transparency and client protection.
MiFID is the EU framework regulating investment services, updated to MiFID II in 2018. It sets broker transparency, best-execution and retail leverage rules across Europe.
MiFID (Markets in Financial Instruments Directive) is the core EU regulation framework for investment services and financial markets. First implemented in 2007 and updated to MiFID II in 2018, it sets rules for broker transparency, best execution, client categorisation, and leverage limits for retail traders. MiFID II introduced significant restrictions on CFD trading in Europe, including leverage caps and negative balance protection requirements.
How It Works
- Classifies clients as retail, professional, or eligible counterparty with different protections
- Requires best execution: brokers must prove they got the best available price
- Caps leverage for retail CFD traders (30:1 for major forex, 2:1 for crypto)
- Mandates negative balance protection for retail clients
Trading Tips
If you trade with an EU-regulated broker, MiFID II leverage limits apply to your account
Professional client status unlocks higher leverage but removes some retail protections
MiFID-regulated brokers must disclose the percentage of retail accounts that lose money
Related Terms
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