The Markets in Financial Instruments Directive will significantly alter financial services regulation in Luxembourg and Europe. MiFID, the Markets in Financial Instruments Directive is a Directive (The European Union Directive is a set of privacy requirements that took effect in 1998 and ordered European member nations to enact compliant legislation. It deals with the establishment of Data Protection Authorities, people's rights to personal information and enforcement) from the European Commission instructing EU member states to enact primary legislation. The Markets in Financial Instruments Directive (MiFID) will bring about European Union-led regulatory changes that will enforce various changes to the way that brokers and exchanges conduct business. MiFID is currently scheduled to go into effect in April 2007. In summary, MiFID demands more transparency and competition that will dramatically alter existing market structure. Its implementation will significantly alter financial services regulation in the UK, how firms operate their businesses and the way they interact with their customers.

1. Investment services:  MiFID broadens the range of investment services for which authorization is required. Investment advice will be upgraded to a core investment service. Ancillary services investment firms can provide are clarified.

3. Conduct of business rules:  MiFID sets out new conduct of business rules that apply to client classification, marketing, suitability and appropriateness tests, agreements, reporting and best execution. Best execution provisions will have a large impact on the current operations of financial firms. An investment firm will be required to take all reasonable steps to obtain the best possible results taking into account price, cost, speed, likelihood of execution and settlement, size, nature and venue or any other consideration when executing orders.

4. Markets and transparency:  MiFID introduces pre-and post trade transparency rules for regulated markets, multilateral trading facilities and systematic internalizes. MiFID will have an impact on many business functions such as: