Corporate Advisory

MiFID II – The Road Ahead

The FCA has recently published a speech from its recent MiFID II conference entitled MiFID II – the road ahead.

In the speech Mr Lawton covers both the EU and UK timeline for finalising MiFID II / MiFIR by 3 January 2017. In particular he notes:

  • That ESMA recently published the draft technical standards and that these draft standards have been sent to the European Commission for endorsement which can take up to three months.
    • After this the draft standards are subject to scrutiny by the European Parliament and the Council of the EU, a process that can in theory last several more months.
    • If the Commission, Council and Parliament do not want to make any changes, the technical standards could be finalised in Q1 2016.
    • Ultimately the FCA will have to wait and see if this all goes smoothly although Mr Lawton states that the FCA has no reason to think it won’t;
  • Last December ESMA submitted to the Commission its advice on the Delegated Acts.
    • The Commission has not yet reached a position where it has been able to finalise and publish the Delegated Acts.
    • While these were expected to be published over the summer, November or December now looks much more likely
  • The FCA’s and HM Treasury’s work is heavily dependent on seeing the near final EU rules.
    • The FCA’s current expectation is to publish a first consultation paper this December. It expects to publish at least one more in early 2016.

In relation to the FCA’s expectations regarding authorisations Mr Lawton notes that:

  • MiFID II / MiFIR will require certain firms such as Organised Trading Facilities, firms undertaking speculative trading in commodity derivatives and firms utilising high-frequency trading methods to be registered for their status or activities for the first time. For some, this will mean applying to the FCA for new permissions, but others will have to go through the FCA’s authorisation process for the first time; and
  • The FCA’s current intention is to start making new application forms available in early 2016 and start accepting draft applications from April.