What is the purpose of MIFID II legislation?

The purpose of MIFID II legislation is to govern firms providing services related to financial instruments, making it essential for the functioning of financial markets in Europe. MIFID II, which stands for the Markets in Financial Instruments Directive II, was implemented to enhance investor protection, increase transparency, and improve the overall efficiency of financial markets.

This legislation applies to investment firms, trading venues, and other entities dealing with financial instruments, ensuring that they adhere to strict regulatory standards. This includes requirements for reporting trades, maintaining better quality of information for investors, and ensuring that firms conduct business in a manner that prioritizes the best interests of their clients.

The options related to regulating only banking institutions, mandating financial education, or improving taxation frameworks do not accurately capture the comprehensive scope and intent of MIFID II, which primarily targets investment services and the associated regulatory environment rather than these other areas.