HM Treasury has published three updated draft statutory instruments and set out the government’s policy decisions on transposing the recast EU Markets in Financial Instruments Directive (MiFID II) into UK law by 3 July 2017. The directive aims to improve transparency of trading activities and competition, requiring more trading of equities and derivatives on trading venues, while improving investor protection. The directive will apply generally from 3 January 2018. The statutory instruments are:
the draft Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017;
the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017; and
the draft Data Reporting Services Regulations 2017.
The Treasury consulted between March and June 2015 on a number of aspects of its approach to transposing the directive. The European Commission decided in February 2016 to delay the deadline for transposition by one year until July 2017 and general application of the directive until January 2018. The Treasury has now confirmed in a response document its approach to several areas, including:
maintaining the UK’s existing third-country regime, which allows, but does not require, third-country firms to establish a branch in the UK in order to provide investment services and activities;
creating a standalone regime for data-reporting service providers (DRSPs) in relation to the obligations under the directive, with an amended definition of ‘data reporting service’ and deciding against creating new offences in relation to market manipulation by DRSPs;
maintaining the proposed approach on the requirement for national authorities to establish limits on the net position that a person may hold in commodity derivatives, set out in Part 3 of the draft Markets in Financial Instruments Regulations, with some drafting improvements;
providing the FCA with powers in relation to certain non-authorised persons;
maintaining the investor protection proposal to bring certain regulated activities involving structured deposits within the UK regulatory framework;
a new standalone power in relation to investment firms for removal of board members;
no requirement for new ‘organised trading facilities’ to obtain a separate permission for dealing on their own account, with a notification regime under FCA rules;
legislating to treat ‘binary options’ as financial instruments, under FCA rules; and
ensuring that derivative contracts relating to currencies are not financial instruments where, inter alia, they are a spot contract or a means of payment.
HM Treasury has published three updated draft statutory instruments and set out the government’s policy decisions on transposing the recast EU Markets in Financial Instruments Directive (MiFID II) into UK law by 3 July 2017. The directive aims to improve transparency of trading activities and competition, requiring more trading of equities and derivatives on trading venues, while improving investor protection. The directive will apply generally from 3 January 2018. The statutory instruments are:
the draft Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017;
the draft Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017; and
the draft Data Reporting Services Regulations 2017.
The Treasury consulted between March and June 2015 on a number of aspects of its approach to transposing the directive. The European Commission decided in February 2016 to delay the deadline for transposition by one year until July 2017 and general application of the directive until January 2018. The Treasury has now confirmed in a response document its approach to several areas, including:
maintaining the UK’s existing third-country regime, which allows, but does not require, third-country firms to establish a branch in the UK in order to provide investment services and activities;
creating a standalone regime for data-reporting service providers (DRSPs) in relation to the obligations under the directive, with an amended definition of ‘data reporting service’ and deciding against creating new offences in relation to market manipulation by DRSPs;
maintaining the proposed approach on the requirement for national authorities to establish limits on the net position that a person may hold in commodity derivatives, set out in Part 3 of the draft Markets in Financial Instruments Regulations, with some drafting improvements;
providing the FCA with powers in relation to certain non-authorised persons;
maintaining the investor protection proposal to bring certain regulated activities involving structured deposits within the UK regulatory framework;
a new standalone power in relation to investment firms for removal of board members;
no requirement for new ‘organised trading facilities’ to obtain a separate permission for dealing on their own account, with a notification regime under FCA rules;
legislating to treat ‘binary options’ as financial instruments, under FCA rules; and
ensuring that derivative contracts relating to currencies are not financial instruments where, inter alia, they are a spot contract or a means of payment.
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