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31 december 2007

MiFID Directive increases competition

The MiFID Directive, which became effective in November 2007, has very big implications for banks and also for Paris, thus impacting its appeal as a global financial centre.


By providing a harmonised framework for investment services and activities, the new directive intensifi es competition between financial centres. By abolishing the order "concentration rule", the directive also profoundly modifies the environment for investment services and levels the playing field between exchanges.

MiFID also renews the relationship between banks and their customers by setting forth formal rules for the marketing of investment products. It therefore increases competition in such areas as quality of service, transparency, ensuring that products suit customer needs and that orders are executed in the customer's best interests.

On 1 November 2007, French banks were ready to comply with the new directive. Adapting to the new regulatory framework required a tremendous amount of work to reorganise information systems, train branch staff and inform customers.

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