Applications and notifications under MiFID II

The Markets in Financial Instruments Directive (MiFID) II applies from 3 January 2018, and will deliver some important changes to the scope of regulation in the UK. It introduces new processes for authorising investment firms and will require investment firms and others to make a range of notifications.

As a result, it will have a significant impact for a range of authorised persons, recognised investment exchanges, and some businesses that currently do not have to be authorised. It also means that some other firms have to apply for authorisation, variations of permission or make notifications to us in a specific way.

In particular, MiFID II introduces a new investment service for firms operating an organised trading facility (OTF) and the new financial instrument of emission allowances. It also introduces changes to the scope of existing investment services and financial instruments, and narrows the scope of exemptions currently provided under MiFID.

MiFID II also requires entities that carry out the following data reporting services to be authorised:

  • operating an approved publication arrangement (APA)
  • operating a consolidated tape provider (CTP)
  • operating an approved reporting mechanism (ARM)

In addition, HM Treasury is creating a new investment type of structured deposits for specific regulated activities and is including certain types of binary options in the investment type of contract of difference.

MiFID II: application and notification user guide

Show MiFID II – Application and notification user guide (PDF)

We have published this user guide to help firms decide which applications and notifications they should make and to explain how to do so. Links to the relevant forms are also included in the guide.

The user guide is aimed at a very broad audience and covers:

  • what firms need to consider
  • key changes
  • investment firms
  • fees
  • article 3 MiFID exempt firms
  • approved persons
  • structured deposits
  • data reporting services providers (DRSP)
  • market data processor (MDP) on-boarding and market data reporting
  • market infrastructure providers
  • passport notifications and tied agents
  • commodity regime
  • transparency waivers and deferrals
  • non-discriminatory clearing access for financial instruments

Ensuring readiness for MiFID II implementation

In advance of when the MiFID II regime comes into effect on 3 January 2018, firms must ensure they have the correct permissions in place to carry out the relevant regulated activities from that date.

Since 30 January 2017, firms have been able to submit draft authorisation and variations of permission applications. On 1 April 2017, the domestic legislation relating to FSMA applications came into force and from 3 April onwards we are able to accept formal applications from firms.

For firms applying to be data reporting services providers, the legislative changes will come into force later. In the meantime, those firms can submit applications, which will be treated as draft until the legislation comes into force.

Deadlines for authorisation and passporting

Firms impacted by MiFID II should apply now for authorisation or for variation of permission, otherwise they risk being unable to operate in the UK market after 3 January 2018, when MiFID II takes effect. The deadlines for the submission of complete authorisation and passporting applications are:

  • investments firms applying for authorisation or a variation of permission: 3 July 2017 (This is the final deadline for submitting a complete application, the majority of applications we receive are incomplete so we encourage firms to apply well in advance to increase the chance of obtaining the relevant permissions by 3 January 2018.)
  • data reporting services providers (DRSPs) applying for authorisation: 3 July 2017 (with the exception of a non-equity CTP where firms should apply for authorisation by March 2019)
  • cross-border service passport notifications: 2 December 2017, this deadline will help us assess applications and notifications and/or send them to relevant regulators in the European Economic Area (EEA) before MiFID takes effect on 3 January 2018.
  • establishment passport notifications: as early as possible after the passporting gateway opens on 31 July 2017