In July, Croatia’s parliament enacted a new Capital Markets Act to harmonize domestic legislation with EU standards. The legislation implements MiFID II and MiFIR—the EU’s foundational financial markets regulations designed to create “fair, safe and more efficient markets” with enhanced transparency across all market participants.

Key Regulatory Changes

The new framework establishes comprehensive rules spanning trading venues, investment firms, central counterparties, and product distributors. Investment companies must now report all transactions—both regulated market trades and over-the-counter deals—covering all EU financial instruments including stocks, bonds, ETFs, structured products, and derivatives.

Expanded Authority

The Croatian Financial Services Agency (HANFA) gains enhanced oversight capabilities, including verification of financial statements for securities traded on the Zagreb Stock Exchange and authority to impose corrective measures when necessary.

Investor Protections

Enhanced safeguards include more frequent client reporting, transparent disclosure of investment costs, and mandatory maintenance of communication and business records. Investment firms from non-EU countries must establish subsidiaries within EU markets.

Market Integrity Measures

The reforms introduce prohibitions against insider trading and market manipulation, establish trading limits on commodity derivatives and emissions allowances, and impose stricter penalties for non-compliance. Additional requirements address high-frequency trading, algorithmic trading, and expanded reporting obligations to European regulators.