What are the basic principles of the MiFID directive?

MiFID (Markets in Financial Instruments Directive)

The financial sector is one of the main pillars of the Andorran economy and is deeply internationally interconnected through  its presence in other markets outside the Principality, as well as the European Union. It is therefore important that the Andorran legal framework meets the international standards in terms of financial regulation.

The former Law 8/2013 had already transposed most of the above-mentioned directives, so that these had already been partially introduced into the Andorran legal system. However, an amendment of Law 8/2013 is necessary to comply with all of these directives and their implementing regulations.

On 15 February 2019, the Law which amends Law 8/2013, of 9 May, on organisational requirements and operating conditions for institutions operating in the financial system, investor protection, market abuse and financial collateral agreements was approved.

The amendments introduced mark a step forward and constitute an improvement in the protection of markets and clients of investment services.Also, a number of improvements have been made in relation to the classification of clients, client information requirements, incentives, suitability and appropriateness assessments, order execution, conflicts of interest, client asset protection, recordkeeping and markets.

Recently, on 16 November 2023, the Organisation and Operation of Financial System Operating Institutions and Market Abuse Bill was introduced to Parliament. Its aim is to update the aforementioned regulations again to seek to align them with the MiFID II Directive. In particular, this bill imposes new obligations regarding advice, portfolio management, suitability and eligibility, product governance, customer information, incentives and pay, conflicts of interest, asset safeguarding, recordkeeping, improved execution, and internal control.