What does MiFIR cover, and whom does it apply to?

MiFIR is Regulation (EU) No 600/2014 on markets in financial instruments. Because it is a regulation, it has applied directly in every Member State since 3 January 2018, with no national law needed to bring it into force. It sits alongside Directive 2014/65/EU, the MiFID II Directive, which Cyprus transposed through Law 87(I)/2017. The two acts together are usually called MiFID II; MiFIR holds the market-structure rules that must be identical across the EU. In Cyprus, Law 87 names CySEC and the Central Bank of Cyprus as the competent authorities for MiFIR (Article 68). Either may sanction any breach of MiFIR under that Law (Article 71).

Article 1(1) lists what MiFIR covers. It sets uniform requirements on disclosing trade data to the public; reporting transactions to competent authorities; trading derivatives on organised venues; non-discriminatory access to clearing and to trading in benchmarks; product intervention powers of ESMA, the EBA and national authorities, together with ESMA's powers over position limits and position management; and services provided by third-country firms, with or without a branch, after a Commission equivalence decision. The exam material lists these as seven areas, because it splits product intervention from ESMA's position powers. It does not include the point added on 1 January 2022 by Regulation (EU) 2019/2175: the authorisation and supervision of data reporting service providers, explained in What are APAs, ARMs and CTPs, and who supervises them today? CySEC's best-known use of product intervention is described in How does CySEC restrict CFDs and binary options for retail clients?

The core addressees in Article 1(2) are investment firms, credit institutions when they provide investment services or perform investment activities, and market operators, including the trading venues they operate. Other bodies are caught only by particular titles. Title VI, on non-discriminatory access to CCPs, trading venues and benchmarks, also applies to central counterparties and to persons with proprietary rights to benchmarks. Title VIII applies to third-country firms that provide services in the EU under a Commission equivalence decision.

The exam material says that CCPs and third-country firms are subject only to Titles VI and VIII respectively. That pairing is still the right starting point, but the list has grown. Since 26 June 2021, Regulation (EU) 2019/2033 has also applied the product intervention chapter (Title VII, Chapter 1) to third-country firms serving clients in the EU. Since 1 January 2022, data reporting service providers have been governed by Title IVa. Title V on derivatives also reaches financial and non-financial counterparties. Since 28 March 2024 it reaches only those subject to the EMIR clearing obligation; before, it reached all financial counterparties and non-financial counterparties above the EMIR clearing threshold. This is explained in Where must derivatives be traded and cleared, and how is portfolio compression treated?

Since 28 March 2024 Article 1(5b) also states the basic market structure. Every multilateral system must operate as a regulated market, MTF or OTF. Systematic internalisers follow Title III, and other firms trading outside a venue must publish their trades under Articles 20 and 21. MiFIR is not consumer-protection law for banking, so deposit-taking and lending fall outside it. Securities financing transactions are outside Titles II and III on transparency. Transactions by central banks of the European System of Central Banks (ESCB) for monetary, foreign-exchange or financial stability policy are exempt only from the non-equity transparency rules in Articles 8, 8a, 8b, 10 and 21, and only if the central bank has told its counterparty in advance.

Regulation (EU) 2024/791, the MiFIR review, entered into force on 28 March 2024 and set no separate application date. Many changes applied at once. Others started on dates set in the amended articles, or waited for new technical standards or ESMA systems. Until the new standards applied, the older delegated acts kept applying (Article 54(3)). For this chapter the main changes are a single 7% volume cap, narrower transparency for bonds and derivatives, new quote sizes for systematic internalisers, a trading obligation aligned with EMIR clearing, and a wider exemption for post-trade risk reduction, including compression. The review also set up a procedure for ESMA to select one consolidated tape provider for each asset class. ESMA authorised the first, for shares and ETFs, in July 2026.

The review also banned payment for order flow (Article 39a). A firm acting for retail clients, or for clients treated as professional at their own request, may not receive any fee, commission or non-monetary benefit from a third party for executing their orders on a particular venue or for forwarding them to a third party for execution there. Venue fee rebates that benefit only the client are allowed. Member States could keep a temporary exemption until 30 June 2026, but Cyprus did not use it, so the ban has applied to Cypriot firms since 28 March 2024. Its link with best execution is covered in What do best execution and client order handling require?