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The quiet before the MiFID storm

Lack of MiFID II applications making FCA nervous that firm's will need to cease trading

· News,MiFID II,MTF OTF

For firms requiring new permissions as a result of MiFID II, the FCA set the deadline for submitting "complete" applications as 3 July 2017. However, only received 121 applications were received by that date, and that figure includes both "complete" and "incomplete" applications.

The FCA is concerned that firms may not realise that failing to meet this deadline will likely mean that they must cease trading come 3 January 2018.

Today the regulator emailed firms to warn them to submit applications without delay, and that, having missed the deadline, they will also need to put in place contingency plans.

The email went to pains to specify that there will be consequences of continuing with unauthorised business beyond 3 January 2018:

"Consequences of acting without our authorisation


Firms that conduct MiFID II activities without the necessary permissions may face civil, regulatory and/or criminal consequences. In June, we published our first statement which provided firms with more information on the importance of applying now and the consequences of carrying out regulated activities without the necessary permissions. "

You can find more detail about the consequences of this for both authorised and unauthorised firms in the FCA's June statement.

From today's email and various other interactions, it is clear that the regulator is certainly open to dealing with applications that are received after 3 July, and that for those received soon it will endeavor to process them ahead of the deadline.

However, there is a dawning realisation that these applications are not straightforward to put together. Particularly, those firms who are only now aware that they need to register as an MTF or OTF may simply be unable to quickly create a complete application.

 

And as a result of this, there may be many firms needing to stop or curb business in the new year.

However, there is a dawning realisation that these applications are not straightforward to put together. Particularly, those firms who are only now aware that they need to register as an MTF or OTF may simply be unable to quickly create a complete application.

And as a result of this, there may be many firms needing to stop or curb business in the new year.

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