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27 March 2015

FCA asks firms for views on MiFID II implementation

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The discussion covers certain aspects of the revised MiFID II, ahead of formal consultation later in 2015.

MiFID II is a wide-ranging piece of European legislation that will impact on wholesale markets and a wide range of financial services firms in the UK. The FCA is seeking views from firms and other stakeholders on certain aspects of MiFID II where we have policy choices to make. These relate to MiFID II’s conduct of business and organisational requirements. Its provisions will take effect on 3 January 2017.

The FCA welcomes feedback from firms, industry and consumer groups, and other stakeholders. Responses will be considered in the development of policy proposals ahead of consulting on the full set of Handbook changes later in 2015.

David Geale, director of policy at the FCA, said: “MiFID is a very significant piece of legislation with implications for many of the firms that we regulate and they all need to start planning for the Directive’s implementation. We have policy choices to make on some areas of how the Directive applies in the UK, but not in all, and this paper sets out what those are. In those areas where we can be flexible in our approach, we want firms, large and small, to have an opportunity to give us their early views on the changes we are considering.”

The discussion paper requests views on the following topics:

  • The extent to which the FCA should apply MiFID II provisions to insurance-based investment products and pensions

  • How the FCA should incorporate MiFID II’s investor protection measures for structured deposits into its Handbook

  • Whether the FCA should ban third party rebating for discretionary investment management firms

  • Options for the assessment of local authorities requesting to be treated as professional clients

  • Details on MiFID II’s approach to adviser independence, and how this could be implemented for advice on shares, bonds, derivatives and structured deposits

  • Whether and how the FCA might apply sales-staff remuneration rules to firms not covered by MiFID II, in light of domestic and European policy developments

  • How the FCA might apply recording of telephone conversations and electronic communications requirement to firms which fall within MiFID’s Article 3 exemption, which includes independent financial advisers and corporate finance boutiques; and whether to remove the current recording exemptions for discretionary investment managers in our domestic regime

  • How MiFID II’s requirements on costs and charges disclosure could be implemented practically

  • Exploring potential MiFID II inducement rules for advisers, discretionary investment managers and other firms

The paper also details the FCA’s expectations of the likely restrictions on products that can be classified as non-complex and the practical application of the appropriateness test to a wider range of complex products.

Comments should be submitted by May 26, 2015.

Full media release

Full discussion paper

Online response form

© FCA - Financial Conduct Authority

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