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. 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 this consultation paper forms part of the FCA’s process 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. 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.
Andrew Bailey, Chief Executive of the FCA, commented: “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. As we said in our statement following the EU referendum, firms must 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.”
The FCA published its first consultation paper, covering mainly markets issues, on MiFID II on 15 December 2015 (CP15/43). There will be a further consultation paper later this year. This will mostly be on changes to our Conduct of Business sourcebook.
The closing date for responses to consultation paper CP16/19 is 28 October 2016.
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