SEC issues three-year extension of MiFID II relief
07 November 2019 Washington DC
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The US Securities and Exchange Commission (SEC) has issued an extension of a no-action letter it provided to assist market participants regarding their US-regulated activities for the Markets in Financial Instruments Directive II (MiFID II) research.
Under the extension of the temporary no-action letter, the staff would not recommend enforcement action to the commission under the Investment Advisers Act of 1940 against broker-dealers receiving payments in hard dollars or through research payment accounts from clients subject to MiFID II.
The extension letter details the continued ability of broker-dealers to receive payments for research through client commission arrangements (CCAs), including that the use of CCAs does not affect whether the exclusion for broker-dealers from the definition of “investment adviser” under the Advisers Act may be available.
The no-action letter, which was set to expire 3 July 2020, has been extended until 3 July 2023.
Jay Clayton, chairman of SEC, said: “The extension of the staff’s no-action letter is an important step in our continued efforts to address changes in the market for research payments driven by MiFID II with an eye toward preserving investor access to research to the maximum extent possible.”
He added: “The extension will allow our staff to continue to monitor the evolving impact of MiFID II and evaluate whether any additional guidance or commission action is appropriate. In this regard, our staff is focused on ensuring that market participants have flexibility and choice in how they pay for research.”
Under the extension of the temporary no-action letter, the staff would not recommend enforcement action to the commission under the Investment Advisers Act of 1940 against broker-dealers receiving payments in hard dollars or through research payment accounts from clients subject to MiFID II.
The extension letter details the continued ability of broker-dealers to receive payments for research through client commission arrangements (CCAs), including that the use of CCAs does not affect whether the exclusion for broker-dealers from the definition of “investment adviser” under the Advisers Act may be available.
The no-action letter, which was set to expire 3 July 2020, has been extended until 3 July 2023.
Jay Clayton, chairman of SEC, said: “The extension of the staff’s no-action letter is an important step in our continued efforts to address changes in the market for research payments driven by MiFID II with an eye toward preserving investor access to research to the maximum extent possible.”
He added: “The extension will allow our staff to continue to monitor the evolving impact of MiFID II and evaluate whether any additional guidance or commission action is appropriate. In this regard, our staff is focused on ensuring that market participants have flexibility and choice in how they pay for research.”
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