Domestically, beside the significant resource we have put into ESMA’s work on the implementing measures, we have been working on three main workstreams.
- FCA MiFID II implementation
We have been identifying the major changes that we will need to make as an organisation and how best to go about addressing them. The biggest practical challenges for us will be around issues such as transaction reporting, commodities position reporting and provision of information to ESMA for various purposes. But a significant part of our implementation will also be about communication with firms to assist them in getting to grips with the legislation and dealing with the various notifications, authorisations and variations of permissions that the legislation will require. In that regard our aim is to be in a position to process the notifications and applications so that firms can be ready on 3 January 2017. We will provide much more detail on all of this in the course of next year.
- FCA Handbook changes – making the necessary changes to implement MiFID II
These need to be in place by the middle of 2016. However, we need to know more about the implementing measures, particularly the delegated acts, before we will be in a position to consult on the changes. It is likely therefore that our formal consultation on Handbook changes will not take place until towards the end of 2015. However, we will be engaging on aspects of the changes we need to make ahead of then. In particular we expect to issue a discussion paper towards the end of 2015Q1 which will seek views on various issues relating to conduct of business. This will, amongst other things, be asking about how we should approach dealing with the fact that our conduct of business rules for investment business currently cover insurance-based investment business as well as business relating to MiFID financial instruments.
- Legislation – we will work with the Treasury to agree the legislative changes required to implement MiFID II
The Treasury is looking to consult on the changes in the first quarter of 2015. This consultation will help to facilitate our own consultation on Handbook changes to implement MiFID II later in 2015. The topics that will be covered by the Treasury consultation are disparate but will include amongst others: changes to the boundaries of UK regulation through amendments to the regulated activities order, an authorisation regime for data reporting service providers, changes to the FCA’s supervisory powers (including for position limits), implementing the third country branching provisions in MiFID and changes to the requirements to be met by recognised investment exchanges.
The Treasury will also lead in representing the UK at transposition workshops on MiFID II that the Commission is organising for Member States. The first of these meetings will take place in January 2015. The workshops are designed to help Member States transpose MiFID II in a timely, consistent and legally sound manner.
View FCA website for more details.