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The latest MiFID II instalment

The FCA publishes its first policy statement and another consultation

· MiFID II,Telephone recording,News

On 31March 2017, the FCA published its first policy statement on MiFID II with final rules for firms on a few areas, as well as a fifth consultation paper covering enforcement powers and occupational pension schemes.

Alongside this the FCA is keen to remind firms to submit variations of permission or authorisation applications required as a result of the MiFID II changes.

First Policy Statement

The policy statement(which can be found here) centres on:

  • Markets issues in relation to trading venues including regulated markets, MTFs, OTF’s, Systematic Internalisers, market data and algorithmic trading; and
  • The final rules concerning changes to its Principles For Business, in relation to the application of certain conduct of business rules which will be applicable to ECPs under MiFID II.

The FCA plans to publish another policy statement covering all other areas in June.

Telephone taping

There is particularly good news in the FCA’s policy statement for Article 3 Retail Financial Advisers (RFA’s), on the FCA’s approach to telephone taping and recording electronic communications. The FCA has agreed that these firms can apply the requirements proportionately, meaning that only relevant (instead of all) conversations can be taped, or a written note taken at the same time. Rules on the contents of the written note will be published in June. This flexibility will not be available to MiFID investment firms who are categorised as RFA’s.

The FCA will include its final taping rules in its policy statement in June.

Fifth consultation paper

The fifth consultation paper (which can be found here) included a section for Occupational Pension Schemes (OPS), whose overall MiFID exempt status will not change. However, the conduct of business rules currently applied in relation to inducements (and as part of this research), best execution, telephone taping and record keeping will be updated for MiFID II. The FCA will separately publish final rules for OPS firms.

The paper also covered the FCA's new enforcement power in relation to removing individuals from management boards.

The deadline for comments on the OPS firm changes is 23 June 2017. The deadline for comments on all other aspects of the consultation paper is 12 May 2017.

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