MIFID 2 FCA Roundtable minutiae

The FCA has published the minutes of their 22 October MiFID II Implementation Roundtable attended by FCA officials and a panoply of trade associations (TAs). Items of note as follows:

• Forthcoming FCA consultations. The FCA confirmed its plan to publish a draft Handbook Guide to MiFID II, focussing on the UK’s implementation. The agency will publish a markets issues consultation paper in December 2015 and a second in March 2016 with reference to: client assets, systems and controls, enforcement, commodities, financial instrument definition and conduct matters. Given the second paper’s wide remit, its consulation length may be reduced to facilitate compliance with the 3 July 2016 transposition deadline.
• MiFID II Delegated Acts Timeline. The FCA believes that the Delegated Acts will be adopted toward the end of 2015. OJ publication will follow a first quarter 2016 following a period of scrutiny by the EU Parliament and Council.
• Regulatory and Technical Standards. The EU Parliament and Council are discussing the draft standards. External commentary to date has focussed on non-equity transparency, position limits, the ancillary exemption for commercial firms trading commodity derivatives, position limits and best execution.
• Level 1 and 2 Interpretive Guidance. With reference to the detailed interpretation of potentially ambiguous Level 1 and 2 text, the FCA said it will seek to communicate with firms across a broad front to assist them with implementation but they would also need to exercise their own judgement. Guidance from ESMA and the FCA could not be expected to answer all the detailed questions firms would have.
• Level 3 Guidance status. The FCA confirmed that level 3 guidance does not have the same status as rules but provides important information about NCAs’ supervisory expectations. The FCA said it had been collecting issues which might be contenders for inclusion in ESMA guidelines and Q&A and would be happy for industry to send it lists of issues they thought ought to be considered.

The MiFID II implementation task is vast and the 3 January 2017 deadline is approaching fast. UK market participants will not be able to cite lack of information from their Regulator as a reason for non-compliance. To date, the FCA has done an excellent job of communication, extending even to highlighting those areas of its own map that are marked terra incognita. Its willingness to go the extra outreach mile are in marked and welcome contrast to its predecessor.

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