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18th January 2017

FCA issues  Guide for Applications & Notifications for MiFID II

The Financial Conduct Authority has now published a helpful user guide for firms in relation to the revised Markets in Financial Instruments Directive (MiFID II). MiFID II will apply across the EU from 3rd January 2018 and will bring some important changes to the scope of regulation throughout the UK.  

Included within the MiFID II Application & Notification Guide are key considerations for firms such as the key changes MiFID II will bring, along with answering practical questions such as  who will be affected and how. In addition the guide provides links to relevant forms for affected firms.

Investment Firms affected by MiFID II

In particular, MiFID II introduces new processes for authorising investment firms with a range of notifications being required from investment firms and others.

Consequently, there will be considerable impact upon a range of recognised investment exchanges, authorised persons and also some firms and businesses that do not have to be authorised at present.

Thus, MiFID II will mean that some businesses will have to apply for authorisation, and other firms will have to apply to vary their permissions or make other specific notifications to the regulator.

MiFID II Application & Notification Guide

To help firms determine which applications and which notifications they should make for MiFID II, the FCA have now published the MiFID II Application & Notification Guide. The MiFID II Guide explains how these applications and notifications should be made as well as providing firms with links to the relevant forms.

Who is the MiFID II Guide aimed at?

The FCA’s MiFID II Guide is aimed at providing wide ranging advice and guidance to those within the industry, thus the following topics are covered:

• what firms need to consider
• key changes
• investment firms
• fees
• article 3 MiFID exempt firms
• approved persons
• structured deposits
• data reporting services providers (DRSP)
• market data processor (MDP) on-boarding and market data reporting
• market infrastructure providers
• passport notifications and tied agents
• commodity regime
• transparency waivers and deferrals
• non-discriminatory clearing access for financial instruments

Getting ready for MiFID II: Next steps for Firms

Before MiFID II becomes effective in January next year, firms must ensure they have the correct permissions in place to carry out the relevant regulated activities from the date of implementation (3rd January 2018).

The FCA have also published details of deadlines for authorisation applications and passporting notifications in addition to the date from when they can be submitted. From 30th January 2017, firms will be able to apply for authorisation and any variation of permissions. For passport notifications, applications can be submitted from 31st July 2017.

Deadlines for MiFID II Authorisation & Passporting

Whilst the regulator is encouraging firms to submit applications and notifications as soon as possible, the deadlines for receipt of specific MiFID II applications and notifications are as follows:

• 3rd July 2017: Investments firms applying for authorisation or a variation of permission
• 3rd July 2017: Data reporting services providers (DRSPs) applying for authorisation, (with the exception of a non-equity CTP where firms should apply for authorisation by March 2019)
• 31st July 2017: establishment passport notifications
• 2nd December 2017: cross-border service passport notifications

Whilst the regulator is still in the process of revising the FCA Handbook ready to implement MiFID II, they have consulted upon what those changes will be. The latest consultation (see Fourth MiFID II Consultation) is still open for comments and the FCA is anticipating publishing two policy statements in March and June 2017 that detail the final changes to the FCA Handbook.

MiFID II Application & Notification Guide for Firms