The Financial Conduct Authority (FCA) is seeking early views from firms, trade bodies and consumer groups on how it might implement certain aspects of the recast Markets in Financial Instruments Directive, known as MiFID II.
One of the aims of MiFID II is to reinforce investor protection standards by strengthening conduct of business and organisational requirements. The FCA has policy choices to make in some areas on how MiFID II is implemented in the UK and is asking for views before it consults more extensively on rule changes at the end of the year, once MiFID II’s implementing measures are finalised.
David Geale, director of policy at the FCA, said:
“MiFID is a very significant piece of legislation with implications for many of the firms that we regulate and they all need to start planning for the Directive’s implementation.
“We have policy choices to make on some areas of how the Directive applies in the UK, but not in all, and this paper sets out what those are. In those areas where we can be flexible in our approach, we want firms, large and small, to have an opportunity to give us their early views on the changes we are considering.”
The discussion paper requests views on the following topics:
The paper also details the FCA’s expectations of the likely restrictions on products that can be classified as non-complex and the practical application of the appropriateness test to a wider range of complex products.
Those with comments on the discussion paper have until 26 May 2015 to fill in an online response form, or to write to the FCA with their views.
The EU legislative timetable for the implementation of MiFID II is challenging. The European Commission is likely to publish the MiFID II implementing measures later this year.
Following that, and allowing time for feedback on the discussion paper to be considered, the FCA intends to consult on the necessary changes to its Handbook towards the end of the year. The FCA will confirm final rules by July 2016, by which time EU Member States must have transposed MiFID II into national laws and regulations.
This is to give firms as much time as possible to respond to the consultation and to implement the required changes ahead of MiFID II taking effect on 3 January 2017, the date from which firms will need to comply with MiFID II.
The FCA has published a timeline today, to set out to firms how MiFID II will be implemented.
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