On January 6, the Financial Conduct Authority (FCA) held a roundtable (Roundtable) with trade associations to discuss the implementation of the revised and recast Markets in Financial Instruments Directive and the associated Markets in Financial Instruments Regulation (jointly referred to as MiFID II). The FCA confirmed at the Roundtable:

  • Application date and transposition deadline: The FCA expects further clarity from the European Commission during January as to whether or not the application date of MiFID II will be delayed. However, the FCA also confirmed that it does not have clarity if the transposition deadline of July 3 will be delayed (the EU directive elements of MiFID II have to be brought into effect in the national law of each EU country; the Markets in Financial Instruments Regulation is binding law in each EU country).
  • Implementing measures: The adoption of the delegated acts and technical standards under MiFID II is an ongoing process that is “expected to progress in the next month or so.”
  • Consultation on implementation: The FCA described its MiFID II Implementation – Consultation Paper I (CP 15/43) (CP1) as “largely legal carpentry” with limited discretion for domestic interpretation. CP1 covers secondary trading of financial instruments and closes for consultation on March 8.

The FCA confirmed at the Roundtable that it intends for the European Securities and Markets Authority’s transaction reporting guidelines (published for consultation in December 2015) to replace the existing FCA transaction reporting guidance.

However, while the FCA noted it expects to publish a further Consultation Paper in the first half of 2016, it cautioned that the timing of publications depends on further clarity in relation to the EU legislation.

Depending on when the FCA publishes a second Consultation Paper, firms impacted by MiFID II may not have clarity on the MiFID II implementation rules until mid-2016 at the earliest. This leaves a limited amount of time for firms impacted to make all necessary changes to comply with MiFID II by the current deadline of January 3, 2017, making the deferral of the much-debated implementation very welcome.

The FCA’s MiFID II Implementation Roundtable minutes can be found here.

The CP1 can be found here.