MiFID II will come into effect on 3 January 2018. The paper published today forms part of the FCA’s process to make the necessary changes to the FCA’s Handbook to implement it.
The paper 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.
The FCA published its first consultation paper on MiFID on 15 December 2015, mainly covering markets issues. There will be one more consultation paper this year, focused on changes to the FCA's Conduct of Business sourcebook.
MiFID II revises the original directive to improve investor protection, promote market integrity, and to meet G20 commitments on reforming and strengthening derivatives markets.
“MiFID II contains important measures to enhance investor protection and bolster financial stability," said Andrew Bailey, chief executive of the FCA. "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," continued Bailey.
He added: "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 original MiFID was introduced in 2007 and it set the regulatory framework for the buying, selling and organised trading of shares, bonds, units in collective investment schemes and derivatives across EU.
The closing date for responses to consultation paper is 28 October 2016.