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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.

©2018 Katten Muchin Rosenman LLP


About this Author

David A. Brennand, Financial Services Lawyer, Katten Muchin Law Firm

David Brennand is a partner in the Financial Services practice in Katten Muchin Rosenman UK LLP. David provides advice to a wide range of clients active in asset management on a broad spectrum of matters pertinent to their operations, with a particular focus on advising asset managers on the structuring and ongoing operation of hedge and other alternative fund structures investing in a diverse range of asset classes.

As well as advising on fund structuring and their ongoing operation, David's expertise also extends to advising asset managers and...

Carolyn H. Jackson, International Attorney, Katten Muchin law firm

Carolyn Jackson is a partner in Katten Muchin Rosenman UK LLP and is a Registered Foreign Lawyer. She provides US financial regulatory legal advice to a broad range of market participants, including commercial banks, investment banks, investment managers, broker-dealers, electronic trading platforms, clearinghouses, trade associations and over-the-counter derivatives service providers.

Carolyn guides clients in the structuring and offering of complex securities, commodities and derivatives transactions and in complying with US securities and commodities laws and regulations. 

+44 0 20 7776 7625
Nathaniel Lalone, Katten Muchin Law Firm, Financial Institutions Attorney
Senior Associate

Nathaniel Lalone, a partner at Katten Muchin Rosenman UK LLP, has a broad range of experience in the regulation of financial products and financial markets, and frequently provides regulatory and compliance advice to trading venues, clearing houses and buy-side firms active in the over-the-counter (OTC) derivatives, futures and securities markets. He is actively involved in advising clients on the implementation of MiFID 2 and MiFIR in the European Union as well as the international reach of US financial services regulation. He also has significant experience with structuring...

+44 0 20 7776 7629
Neil Robson, private equity fund managers counselor, Katten Law Firm, London

Neil Robson, a regulatory and compliance partner with Katten Muchin Rosenman LLP, focuses his practice on counseling hedge and private equity fund managers and other investment advisers on operational, regulatory and compliance issues. He regularly addresses Financial Conduct Authority (FCA) and EU authorization and compliance under both the EU Alternative Investment Fund Managers Directive (AIFM Directive) and MiFID, cross-border issues in the financial services sector, market abuse, anti-money laundering and regulatory capital requirements, formations and buyouts of...