FCA sheds light on MiFID II rules
31 March 2017 London
Image: Shutterstock
The UK’s Financial Conduct Authority (FCA) has published near-final rules on its implementation of the second Markets in Financial Instruments Directive.
In a policy statement on the implementation, the FCA clarifies some of its requirements around data reporting service providers as a category of firm, reporting requirements and position limits for commodity derivatives.
The statement also outlines system and control requirements for firms providing MiFID investment services, and clarifies portfolio management as an investment service under the directive.
The FCA plans to finalise the rules in another statement due to be released in June, however the regulator specified that any firms affected by the changes to the implementation plans should apply for authorisation, or a variation of permission, now.
Otherwise, such firms risk being prohibited from operating in the UK market after 3 January 2018, when the directive comes into effect.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “MiFID II introduces substantial and wide ranging measures designed to improve investor protection and promote market integrity.”
“Some firms will need to be authorised for the first time, others will need to vary their current permissions.”
“It is critical that those firms submit their applications now. The FCA does not expect to make any significant changes to these rules before they are finalised in June this year, and therefore firms should not delay.”
As a directive, MiFID II is prescribed at EU level, laying out particular aims and requirements. The rules are transposed into law in each EU member state, allowing local regulators some flexibility as to the method of implementation.
To see the FCA’s full policy statement, click here
In a policy statement on the implementation, the FCA clarifies some of its requirements around data reporting service providers as a category of firm, reporting requirements and position limits for commodity derivatives.
The statement also outlines system and control requirements for firms providing MiFID investment services, and clarifies portfolio management as an investment service under the directive.
The FCA plans to finalise the rules in another statement due to be released in June, however the regulator specified that any firms affected by the changes to the implementation plans should apply for authorisation, or a variation of permission, now.
Otherwise, such firms risk being prohibited from operating in the UK market after 3 January 2018, when the directive comes into effect.
Christopher Woolard, executive director of strategy and competition at the FCA, said: “MiFID II introduces substantial and wide ranging measures designed to improve investor protection and promote market integrity.”
“Some firms will need to be authorised for the first time, others will need to vary their current permissions.”
“It is critical that those firms submit their applications now. The FCA does not expect to make any significant changes to these rules before they are finalised in June this year, and therefore firms should not delay.”
As a directive, MiFID II is prescribed at EU level, laying out particular aims and requirements. The rules are transposed into law in each EU member state, allowing local regulators some flexibility as to the method of implementation.
To see the FCA’s full policy statement, click here
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