---
title: "MiFID II"
description: "MiFID II is the EU directive, applied since January 2018, that governs investment services and requires firms distributing funds to disclose costs, define target markets and assess suitability."
canonical: https://fundfactsapi.com/glossary/mifid-ii
published: 2026-09-04
updated: 2026-09-04
publisher: FundFacts API
---

# MiFID II (Markets in Financial Instruments Directive II, MiFID 2, Directive 2014/65/EU)

> MiFID II is the EU directive, applied since January 2018, that governs investment services and requires firms distributing funds to disclose costs, define target markets and assess suitability.

## Definition

**MiFID II** (Directive 2014/65/EU, with the accompanying MiFIR regulation) is the EU framework for investment firms, trading venues and the provision of investment services. It has applied since 3 January 2018 and was retained in UK law after Brexit. Fund management companies are regulated under the [UCITS](https://fundfactsapi.com/glossary/ucits) and AIFM directives rather than MiFID, but MiFID II governs the banks, brokers, advisers and platforms that distribute funds, so it shapes what data a fund must supply to them.

## Why it matters

Four MiFID II requirements touch fund data directly. **Product governance** obliges manufacturers to define a target market and distributors to check clients against it. **Costs and charges** disclosure requires aggregated ex-ante and annual ex-post statements of all product and service costs, including transaction costs. **Suitability and appropriateness** assessments need a product's risk and complexity characteristics. **Inducement rules** restrict what distributors can receive from fund houses. The industry exchanges this information in the standardised European MiFID Template (EMT).

## In the API

FundFacts API is not an EMT feed, but its payload supplies the fund-level facts a distributor's tooling checks against: cost figures in `headlineMetrics.ter`, the [KID](https://fundfactsapi.com/glossary/kid) risk indicator in `riskRating`, the objective, asset class and structure. Example values:

```json
{
  "riskRating": 4,
  "keyFacts": { "assetClass": "Mixed Allocation" },
  "headlineMetrics": { "ter": 1.80 },
  "structure": "UCITS (Luxembourg SICAV)"
}
```

## Common pitfalls

MiFID II costs and charges are broader than the ongoing charges figure: they include transaction costs, incidental costs and the distributor's own fees. Target-market data comes from the manufacturer's EMT, not from the factsheet. Do not treat the risk indicator alone as a suitability decision; it is one input among several. See the [compliance monitoring](https://fundfactsapi.com/use-cases/compliance-monitoring) use case.

## In the FundFacts API payload

- `headlineMetrics.ter`
- `riskRating`

## About FundFacts API

FundFacts turns any fund or ETF ISIN into one dated factsheet (fees and KID costs, the 1–7 risk indicator, holdings, sector and country exposure, returns) read from the fund house's own documents: as a client-ready PDF under your firm's name for advisers and wealth managers, as JSON through its API for developers, or inside ChatGPT and Claude through its MCP server.

FundFacts works inside ChatGPT and Claude as a connector (a remote MCP server): ask about any fund or ETF by ISIN, ticker or name and the assistant answers from FundFacts' dated figures, fees, risk, holdings, exposure and returns, with fund cards, side-by-side comparisons, holdings overlap and portfolio look-through.

- Free API key, no card: https://fundfactsapi.com/signup
- Documentation: https://fundfactsapi.com/docs (OpenAPI: https://fundfactsapi.com/openapi.json)
- MCP server: https://fundfactsapi.com/api/mcp (set-up for every client: https://fundfactsapi.com/mcp-server)
- Pricing: https://fundfactsapi.com/pricing
- Site index for AI assistants: https://fundfactsapi.com/llms.txt
- Informational data, not investment advice.