What types of financial instruments are covered by MIFID?

The correct answer is that MIFID covers transferable bonds and shares. The Markets in Financial Instruments Directive (MIFID) is a European regulation that governs the provision of investment services and activities in financial instruments across the European Union. It is designed to improve the efficiency and transparency of financial markets.

Under MIFID, transferable securities include a broad array of financial instruments that can be traded on secondary markets, such as shares (equities) in corporations and various types of bonds (debt securities). These instruments are particularly significant because they are readily marketable and can be easily transferred between parties, making them key components of financial trading and investment operations.

MIFID does not apply to intangible assets and collectibles, real estate investments, or hedging contracts as standalone categories. Instead, it focuses primarily on securities and derivatives that facilitate investment activities. By clarifying the types of instruments covered, MIFID helps ensure that market participants are subjected to consistent regulations, ultimately leading to increased investor protection and market integrity.