FCA mulls changes to MiFID’s conduct and organisational requirements
30 April 2021 UK
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The Financial Conduct Authority (FCA) is considering making changes to the conduct and organisational requirements to the UK’s Markets in Financial Instruments Directive (MiFID).
MiFID is the collection of laws and rules that regulate the buying, selling and organised trading of financial instruments. The UK laws and regulations implemented its amendment in January 2018 (MiFID II).
The regulation was modified to address deficiencies as part of the process of onshoring EU law, which enables UK laws and regulations to function effectively post-Brexit.
Alongside the Treasury, the FCA is now looking to reform the capital markets specifically at changes to the UK’s regulatory regime to ensure this is adapted to the structures of UK markets and maintaining the highest regulatory standards.
This consultation paper (CP) is the first output of that work and covers changes to two areas to the conduct and organisational rules in UK MiFID: research and best execution reporting.
The UK regulator is proposing to change the existing inducements requirements relating to research. This includes an exemption from the inducement rules for research on small and medium enterprises with a market cap below £200 million and an exemption for FICC research.
Additionally, the FCA is proposing to remove two sets of reporting obligations on firms known as RTS 27 and 28 reports.
According to the regulator, the changes are intended to ensure the rules achieve their objective and reduce compliance costs without compromising high standards of investor protection.
The FCA has opened up a consultation for this and is asking for comments by 23 June 2021.
MiFID is the collection of laws and rules that regulate the buying, selling and organised trading of financial instruments. The UK laws and regulations implemented its amendment in January 2018 (MiFID II).
The regulation was modified to address deficiencies as part of the process of onshoring EU law, which enables UK laws and regulations to function effectively post-Brexit.
Alongside the Treasury, the FCA is now looking to reform the capital markets specifically at changes to the UK’s regulatory regime to ensure this is adapted to the structures of UK markets and maintaining the highest regulatory standards.
This consultation paper (CP) is the first output of that work and covers changes to two areas to the conduct and organisational rules in UK MiFID: research and best execution reporting.
The UK regulator is proposing to change the existing inducements requirements relating to research. This includes an exemption from the inducement rules for research on small and medium enterprises with a market cap below £200 million and an exemption for FICC research.
Additionally, the FCA is proposing to remove two sets of reporting obligations on firms known as RTS 27 and 28 reports.
According to the regulator, the changes are intended to ensure the rules achieve their objective and reduce compliance costs without compromising high standards of investor protection.
The FCA has opened up a consultation for this and is asking for comments by 23 June 2021.
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