June 14, 2021

Volume XI, Number 165


June 11, 2021

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MiFID II Implementing Legislation Published

On June 22, the Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (SI 2017/701) were presented to Parliament. The Regulations transpose elements of the revised Markets in Financial Instruments Directive (MiFID II) and related Markets in Financial Instruments Regulation (MiFIR) into UK law. Member States of the European Union are required to implement MiFID II and MiFIR into national law by July 3, before MiFID II and MiFIR go into effect on January 3, 2018. Other elements of MiFID II and MiFIR have been implemented in the United Kingdom by the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (SI 2017/488), which was made by HM Treasury in March 2017 having been presented to Parliament in draft form in February 2017.

HM Treasury also published an explanatory memorandum to the Regulations. In relation to Brexit, HM Treasury states that until exit negotiations have been concluded and the United Kingdom has left the European Union, the United Kingdom is still bound to implement and apply EU legislation.

In summary, the Regulations cover the following:

  • Part 1 of the Regulations designates the Financial Conduct Authority (FCA), Prudential Regulatory Authority (PRA) and the Bank of England as competent authorities for the purposes of MiFID II and MiFIR;

  • Chapter 1 of Part 2 of the Regulations supports Article 3 of MiFID II and enables investment firms authorized in the United Kingdom to be exempt from the requirements of MiFID II, subject to various restrictions. Chapter 2 of Part 2 contains provisions concerning third-country (non-EU) firms providing investment services in the European Union;

  • Part 3 implements Article 57 of MiFID II, which requires Member States to both put in place limits on the size of positions that can be held in commodity derivatives and to enforce position limits put in place by other Member States;

  • Part 4 imposes controls relating to algorithmic trading and direct electronic access on certain firms and individuals, such as insurance undertakings, that are otherwise exempt from MiFID II;

  • Part 5 gives the FCA and PRA power to remove a person from the management board of an investment firm, credit institution, or recognized investment exchange, in accordance with Article 69 of MiFID II;

  • Part 6 contains a number of miscellaneous provisions, such as duties to inform the European Securities and Markets Authority (ESMA) of certain matters. Part 7 contains further miscellaneous provisions dealing with the transition to the new regime under MiFID II and MiFIR, amendments to legislation and review of the Regulation by HM Treasury; and

  • the Schedules to the Regulations contain modifications and amendments to the Financial Services and Markets Act 2000 and other primary and secondary legislation.

Certain aspects of the Regulations go into effect on June 29, July 3, and July 31, to allow, among other things, further rules to be made and notices given. For all other purposes, the Regulations go into effect on January 3, 2018.

©2021 Katten Muchin Rosenman LLPNational Law Review, Volume VII, Number 174



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...

+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...