MiFID II: FCA insists on UK participation despite Brexit
The UK’s Financial Services Authority has asked financial firms to contribute to its second consultation paper on the Markets in Financial Instruments Directive II implementation, despite the result of the EU referendum leading the UK’s eventual exit from the region.
The Financial Conduct Authority (FCA) said in a statement today that it has published its second consultation paper (CP16/19) on the implementation of the Markets in Financial Instruments Directive II (MiFID II) in the UK on its website and in an available document.
The original MiFID, introduced in 2007, set the regulatory framework for the buying, selling and organised trading of shares, bonds, units in collective investment schemes and derivatives across the European Union.
The consultation paper published today covers a range of issues including position limits and reporting for commodity derivatives, systems and controls requirements for firms providing MiFID investment services and client asset protections.
And FCA chief executive Andrew Bailey has warned financial firms that participation is still necessary despite the result of the EU referendum. “Firms must [still] continue to abide by their obligations under UK law, including those derived from EU law and continue with implementation plans for legislation that is still to come into effect,” he said
The FCA said that MiFID II is revising the original directive to introduce “substantial and wide ranging measures designed to improve investor protection and promote market integrity”, and to meet G20 commitments on reforming and strengthening derivatives markets.
MiFID II takes effect on 3 January 2018, and the latest FCA consultation paper forms part of it’s processes to make the necessary changes to the FCA’s Handbook to implement it. As much of MiFID II is in directly applicable obligations, the FCA and firms need to fulfil their legal responsibilities from the point they come into force.
“MiFID II contains important measures to enhance investor protection and bolster financial stability. It reflects recent themes of UK conduct regulation, such as improved controls on the manufacturing and distribution of financial products, and it implements the international commitments the UK entered into to reform derivatives markets following the financial crisis,” added Bailey.
The FCA published its first consultation paper, covering mainly markets issues, on MiFID II on 15 December 2015 (CP15/43). The regulator said that there will be a further consultation paper later this year but that this will mostly be on changes to its Conduct of Business sourcebook.
The closing date for responses to consultation paper CP16/19 is 28 October 2016.
Read the consultation paper in full here.
This article first appeared on International Investment