Financial institutions which provide investment services are to comply with the rules under MiFID I and MiFID II. MiFID is the abbreviation for “Markets in Financial Instruments Directive”. One of the principal objectives of these Directives is that of harmonizing investor protection across Europe.
To clearly inform consumers of their rights, the FSMA publishes an educational brochure providing information on the various investor protection mechanisms put in place by these Directives.
The brochure gives an overview of the different obligations imposed on firms both before, during and after the investment by the client
Depending on the type of service requested by the client (order to buy or sell a financial product, investment advice or portfolio management), different degrees of protection will apply. For some transactions, the firm will provide an execution‑only service, while for others it will have to conduct a preliminary appropriateness or suitability test.