MiFID II, which comes into effect on 3 January 2018, aims to strengthen investor protection for retail and wholesale investment business.
“Strengthening consumer protection is one of the key aims of MiFID II and this aligns with, and advances, our own statutory objectives,” said Andrew Bailey, chief executive at the FCA.
It will also aim to update and improve rules governing the way capital markets function, contribute to the reform of derivatives markets and strengthen transparency of trading.
“The changes to rules we are proposing today reflect key themes that we have worked on in both retail and wholesale markets over recent years to promote competition and market integrity,” added Bailey.
The third consultation is open until 4 January 2017, except for comments on Chapter 16 – Supervision manual, authorisation and approved persons – which should reach the FCA by 31 October 2016.
“As we said in our statement following the EU referendum result, firms must continue to abide by their obligations under UK law including those derived from EU law. They must continue with implementation plans for legislation that is still to come into effect, of which MiFID II is one such example,” said Bailey.
A fourth consultation paper is likely to be published towards the end of 2016, said the FCA.
Andrew Strange, regulation director at PwC, commented: “Today’s consultation brings together the remaining areas of MiFID II implementation. The sheer range of issues – from raising the standards of best-
execution, to changes to suitability and appropriateness, will require firms to carefully and methodically work through the implications for their business, before engaging with the FCA.”
“Changes to inducement rules are a key focus for firms. Investment firms need to consider how to use research payment accounts; retail focused firms will need to consider the ban of rebating inducements, which will impact both some legacy arrangements with clients, and those firms which offer portfolio management,” continued Strange.
