It will be “very difficult” for UK-based firms to maintain equivalency with the second Markets in Financial Instruments Directive and Regulation (MiFID II/MiFIR) once the UK breaks away from the EU, according to Deutsche Börse.
In its recent regulation bulletin, Deutsche Börse noted that the Financial Conduct Authority (FCA) “does not intend to loosen their regulatory regime, irrespective of the specific arrangements or treaties the UK and the EU may enter into”.
In a statement to the financial industry soon after the UK’s EU referendum result was announced, the FCA confirmed that it expects firms that come under its regulatory remit, such as asset managers and hedge funds, should continue to abide by its implementation calendar.
In the same bulletin, Deutsche Börse predicted that the UK will have to be treated as a ‘third country’ for the purposes of MiFID II and MiFIR compliance.
“The UK will be under some pressure to maintain comparable legal standards where its firms intend to enter into any activities with EU firms categorised as ‘investment services’ under MiFID II/MiFIR.” Deutsche Börse stated.
