Its main objectives are to increase competition and investor protection, as well as level the playing field for market participants in investment services.

This is a change from the prior EU financial service legislation, which featured a "minimum harmonization and mutual recognition" concept.

"Maximum harmonization" does not permit states to be "super equivalent" or to "gold-plate" EU requirements detrimental to a "level playing field".

Another change was the abolition of the "concentration rule" in which member states could require investment firms to route client orders through regulated markets.

[6] The directive and regulation include fewer exemptions and expand the scope of MiFID 1 to cover a larger group of companies and financial products.

[9] While the original law did succeed in lowering prices and expanding choices for investors, weaknesses in ISD's structure became apparent during the financial crisis in 2008.

[13] MiFID 1 was introduced under the Lamfalussy procedure, which was designed to accelerate the adoption of legislation based on a four-level approach recommended by the Committee of Wise Men.

[23] National courts are tasked with adjudicating cases involving breaches of MiFID 2 regulations and can impose sanctions, fines, and order corrective actions to ensure compliance.

Courts also interpret how MiFID 2 should be applied in specific national contexts, hence shaping the practical impact of the directive across different jurisdictions.

The Financial Services Authority (FSA), now the FCA, was the body responsible for the regulation of the securities industry in the United Kingdom during the period of implementation.

Prior to Brexit, the UK FCA was proactive in pursuing enforcement actions under MiFID 2, especially concerning the accurate and timely reporting of transactions.

[24] The FCA brought numerous cases involving serious infringements to MiFD 2 before British courts, which usually resulted in the imposition of fines on major financial institutions like UBS and Goldman Sachs.

However, to maintain market stability and ensure smooth cross-border financial services, the UK initially incorporated MiFID 2 into its domestic law under the European Union (Withdrawal) Act.

[27] BaFin imposed a fine of €170,000 on Deutsche Bank due to deficiencies in its anti-money laundering procedures and for not accurately representing its environmental, social, and governance (ESG) investment practices.

Consequently, through the jurisdiction of the GFCC, BaFin played a key role in enforcing MiFD 2 by mandating Deutsche Bank to implement a comprehensive overhaul of its transaction reporting procedures to ensure future compliance with MiFID II regulations.

[32] On 20 October 2011, the European Commission adopted formal proposals for a "Directive on markets in financial instruments repealing MiFID 1 of the European Parliament and of the Council", and for a "Regulation on markets in financial instruments", which would also amend Regulation (EU) No 648/2012 on OTC derivatives, central counterparties and trade repositories.

[33] In March 2012, MEP Markus Ferber suggested amendments to the European Commission's proposals, intended to strengthen restrictions on high-frequency trading and commodity price manipulation.

Some analysts believe the impact of MiFID 2 will lead to global investment research expenditures falling by as much as $1.5 billion annually when the rules come into force.

[41] Within days of coming into effect, Intercontinental Exchange announced plans to transfer trading in 245 energy futures contracts from London to the US, putting transactions under the oversight of US, rather than European, regulators.