Chapter

Agency and Principal Dealing under the Markets in Financial Instruments Directive

Danny Busch

in Agency Law in Commercial Practice

Published in print January 2016 | ISBN: 9780198738473
Published online June 2016 | e-ISBN: 9780191821233 | DOI: http://dx.doi.org/10.1093/acprof:oso/9780198738473.003.0009
Agency and Principal Dealing under the Markets in Financial Instruments Directive

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The chapter focuses on agency and principal dealing under the Markets in Financial Instruments Directive (MiFID). Investment firms regularly act as agents or intermediaries in the execution of transactions in financial instruments. Investment firms also carry out transactions as principals (i.e. on own account). In such cases, the investment firm acts solely as the investor’s contractual counterparty (principal dealing). In some transactions an investment firm acts both as intermediary and on own account. The particular question examined in the chapter is whether allowing the extent of the protection afforded to an investor under the Markets in Financial Instruments Directive (MiFID) to be largely dependent on the distinction between dealing on own account on the one hand and trading on behalf of the client (and other forms of investment service) on the other is justified. The author answers this question in the negative.

Keywords: MiFID; agency; principal dealing; own account; best execution; conflicts of interest; Kay Review

Chapter.  18262 words. 

Subjects: Company and Commercial Law

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