The Malta Financial Services Authority has published a new guide for retail investors on the most important elements of the European Directive for financial markets: the Markets in Financial Instruments Directive (MiFID). The guide, largely based on that published by the Committee of European Securities Regulators (CESR) aims to explain, in clear and straightforward language, the new safeguards retail consumers will benefit from when buying from a range of financial services following the introduction of this legislation across Europe.
The MiFID Directive, which came into effect on 1 November 2007, is a key legislative instrument which establishes how investment firms and the services they provide are regulated. One of its core principles is that firms wishing to provide services to retail investors, must act professionally, provide fair information on financial products, and take into account the individual circumstances of each consumer.
The MiFID Directive aims to harmonise investor protection throughout Europe and increase consumers’ confidence that the products they arebeing sold are actually appropriate for their needs.
The key message of this guide is that the degree of protection that an investor will now receive as a customer in Europe, is directly related to the reliance he places on the firm and on himself. For example, an investor with low financial knowledge or experience who relies on the investment firm for advice or to take decisions on his behalf is given the highest degree of protection.
The guide, in English and Maltese, includes a glossary of some important terms which consumers may come across when investing.
The guide is available free of charge from financial firms or from the MFSA by calling freephone 80074924 or e-mail [email protected] providing full name and address.
An electronic version of the guide is available from www.mfsa.mt.
CESR is an independent Committee of European Securities Regulators. The role of the Committee is to:
- Improve co-ordination among securities regulators;
- Act as an advisory group to assist the EU Commission, in particular in its preparation of draft implementing measures in the field of securities;
- Work to ensure more consistent and timely day to day implementation of community legislation in the Member States.
Each Member State of the European Union has one member in the Committee. The members are nominated by the Member States and are the heads of the national regulatory authorities in the field of securities. The Malta Financial Services Authority is an active member in this Committee.