FCA Gives Firms Breathing Room on MiFID II Compliance
On September 20, a senior official in the UK’s Financial Conduct Authority (FCA) opened the door to an informal conformance period for market participants following the implementation of the revised Markets in Financial Instruments Directive (MiFID II), which takes effect on January 3, 2018. The breadth and scope of the new regulatory and compliance requirements under MiFID II have posed serious challenges to market participants and their clients to be ready in time, even following a one-year delay in implementation from January 2017.
In recognition of the uphill battle facing market participants over the next three months, Mark Steward, executive director of enforcement and market oversight at the FCA, confirmed at a conference hosted by the Association for Financial Markets in Europe that the FCA would act “proportionately” in recognition of the significant investments of time and effort already undertaken by firms. Implicitly acknowledging that not all firms will be ready in time, he stated that the test would be whether a firm had taken “sufficient steps” to meet the new MiFID II requirements. By contrast, firms that “have made no real or genuine attempt to be ready or where key obligations are deliberately flouted” would receive “different” treatment.
The drafted version of Mr. Steward’s speech is available here.