What MiFID II gives you
- Passporting rules for cross-border services
- Client categorisation (retail, professional, eligible counterparty)
- Appropriateness checks for complex products
- Best execution and cost transparency
- Product governance
Passporting
An investment firm authorised in one EEA country can provide services across the EEA after notifying regulators — the basis for most cross-border broker activity in Europe.
Client categorisation
Retail clients get the most protection. Professional status requires meeting set criteria. See retail vs professional.
Appropriateness
Before opening a CFD account, the broker must assess your knowledge and experience and warn you if the product isn't appropriate.
Best execution and costs
Firms must take all sufficient steps to obtain the best possible result for clients and disclose costs and charges up front and periodically, so you can see what trading really costs.
Product governance
Firms must define a target market for each product and avoid distributing it to clients outside that market — part of why CFDs come with prominent warnings.
Frequently asked questions
What is MiFID II?
The Markets in Financial Instruments Directive II, in force since January 2018, which sets EU rules for investment firms and trading venues.
Does MiFID II set leverage limits?
Leverage limits come from ESMA's product intervention measures, made permanent by national regulators. MiFID II provides the wider framework.
CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. Most retail investor accounts lose money when trading CFDs. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money.