MiFID is the acronym for “Markets in Financial Instruments Directive”, a European directive which regulates your bank so that it provides you with the investment products and advice most suited to your personal situation and your objectives. This increases your protection for you as an investor.
The MiFID regulation entered into force in 2007, and was followed by a reform project with MiFID II, in 2018. The changes mainly concern a better knowledge of the investor and his needs, in particular with the investor profile, and greater transparency in portfolio management.
You receive detailed and precise information about your investments from your bank. For any advice, you will receive a personalized document justifying the advice and explaining why it is suitable for your situation. Before any transaction, the bank must verify the adequacy between the level of risk of your portfolio and your risk profile.
This transparency goes hand in hand with a simplification of the investment offer and pricing.
The bank is also required to record emails and telephone conversations relating to your investments. These recordings are used to protect you, but also to keep you informed: you can access them at any time, for example to remind you of the points discussed with your advisor.
The investor profile
Before investing or obtaining an investment recommendation, you must complete a series of questionnaires. These allow your bank to define your investor profile, and better understand your needs:
- What are your investment objectives?
- What is your tolerance for risk?
- What is your level of financial expertise?
With the investor profile, your bank knows you better and is able to provide you with the services and products best suited to your needs and your financial situation. It is now able to take into account your knowledge and experience, your financial situation, your goals and your level of risk appetite.