FCA publishes MiFID II guide
22 November 2017 London
Image: Shutterstock
The UK’s Financial Conduct Authority (FCA) has published a regulatory guide for trading venues grappling with fast approaching the second Markets Financial Instruments Directive (MiFID II) requirements.
The guide sets out an overview of the FCA’s approach to transposition of the recast of MiFID II in the market abuse regulation and recognised investment exchanges sourcebooks, by explaining how they fit within the context of the overall implementation of the legislation at a UK and EU level.
Although MiFID II and the accompanying regulation, MiFIR, are mandatory, FCA stated that “the choice of form and methods of implementation will be left up to national authorities”.
Both are expected to go live on 3 January 2018.
The guide also explains that: “You can be subject to a MiFID II or MiFIR requirement, even if you are not an authorised financial institution.”
As it stands in the UK, MiFIR will become law without the need for domestic legislative intervention, although the future of the EU’s regulatory oversight in the UK market remains uncertain as Brexit negotiations continue.
The guide states that though MiFIR is a separate piece of legislation, “both instruments should form the legal framework governing the requirements applicable to investment firms”, among others, and so “should therefore be read together with that regulation”.
Regulatory technical standards and implementing technical standards are still being prepared in draft by ESMA and are subject to public consultation, before endorsement and making by the commission.
The FCA has stated that the commission will not be cracking down on national authorities on the very first day of implementation, but will allow a gradual approach to give authorities time to adopt the directive and regulation changes.
The guide sets out an overview of the FCA’s approach to transposition of the recast of MiFID II in the market abuse regulation and recognised investment exchanges sourcebooks, by explaining how they fit within the context of the overall implementation of the legislation at a UK and EU level.
Although MiFID II and the accompanying regulation, MiFIR, are mandatory, FCA stated that “the choice of form and methods of implementation will be left up to national authorities”.
Both are expected to go live on 3 January 2018.
The guide also explains that: “You can be subject to a MiFID II or MiFIR requirement, even if you are not an authorised financial institution.”
As it stands in the UK, MiFIR will become law without the need for domestic legislative intervention, although the future of the EU’s regulatory oversight in the UK market remains uncertain as Brexit negotiations continue.
The guide states that though MiFIR is a separate piece of legislation, “both instruments should form the legal framework governing the requirements applicable to investment firms”, among others, and so “should therefore be read together with that regulation”.
Regulatory technical standards and implementing technical standards are still being prepared in draft by ESMA and are subject to public consultation, before endorsement and making by the commission.
The FCA has stated that the commission will not be cracking down on national authorities on the very first day of implementation, but will allow a gradual approach to give authorities time to adopt the directive and regulation changes.
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