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Compound Growth

06 March 2015

Countdown to MiFID II

Today the FCA issued a Discussion Paper that informs of their schedule for implementing MiFID II, set to come into effect for all investment firms on 3rd January 2017.

Whilst the implementation is a little way off yet, the FCA acknowledges that due to discrepancies between MiFID’s independence threshold and that of its own there are some policy choices that it has to make, so is seeking industry opinion before it finalises the rules following consultation at the end of the year.

The closing date for responses to the Discussion Paper is 26th May 2015. The Regulator will then take just over 12 months to finalise the rules for implementation, which will be advised upon next summer.

MiFID II

The FCA is particularly interested in hearing from discretionary investment management firms, stockbrokers and others that provide recommendations to clients on shares, bonds and/or derivatives, financial advisers as well as trade bodies and consumer groups.

In particular the FCA is canvassing opinion on:

 How costs and charges disclosure could be implemented and the extent to which provisions should be applied to insurance-based products and pensions

 Whether it should ban third party rebating for discretionary investment management firms as well as potential inducement rules for advisers, discretionary managers and other firms

 Details on the restrictions placed upon non-complex products and the application of the appropriateness test

 Discussion on whether sales staff remuneration rules should be applied to firms not under MiFID II

 How adviser independence should be implemented on different shares, bonds and structured deposits

 Application of recording exemptions to firms

 How advice on structured products is treated domestically