Will MiFID bring more transparency to the European capital market?
It should. That is its objective. MiFID contains one stream about pre-trade and post-trade transparency. It is about increased and improved, standardized reporting of all transactions done on all markets. Right now, there are many transactions done over the stock exchanges. That’s fine, but there are also so many between two counterparties without any intermediaries or publishing, and all these transactions have to be reported somehow. MiFID is quite strong in these terms. These facts, together with the best execution policy, should definitely increase the transparency of how deals are executed. Q: Does MiFID apply to investment firms that aren’t located in Europe? A: It does if they are operating here and working with EU partners. For example, a bank in Honk Kong that has branches in the EU will have to follow this rule if they want to do business in this market. If Czech people come to its local branch and try to buy some shares and if this is settled through a Hong Kong broker, this
