Europe’s financial sector is getting tougher rules and it will affect the whole world

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Valdis Dombrovskis, vice president of the European Commission and the European Union (EU) commissioner for financial-services policy is helping to drive through a new set of rules for Europe's financial sector.

A new set of rules comes into force for the European financial sector on January 3, which are set to have far-reaching consequences for the industry.

The reforms are an attempt to shine more light on how and when assets are traded. Anyone buying or selling stocks, bonds, foreign exchange, commodities or exchange-traded funds (ETFs) will be affected by the new standards.

The European Commission, the executive arm of the EU, kick-started the launch of the legislation, known as Mifid II, after the original set of rules was found wanting in the wake of the 2008 financial crisis.

Mifid stands for the "Markets in Financial Instruments Directive." On Events explains what it is and how it will affect the financial sector.

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