FCA MiFID II Consultation Paper: How FCA plans to implement parts of MiFID II

Finance Update


On 29 July 2016, the FCA released consultation paper 16/19: MiFID II Implementation

The FCA is seeking stakeholders' views on its proposals for changes to the Handbook to implement the requirements of MiFID II and MiFIR.

Issues covered include:

1. Commodity derivatives

Handbook proposals on MiFID II's regime for position limits, position management and reporting for commodity derivatives contracts.

2. Supervision 

Proposals for updates to: 

  • notification requirements for breaches and information requirements under MiFIR
  • transitional provisions for transaction reporting, and 
  • changes to passporting requirements. 
3. Prudential standards 

Handbook proposals to reflect the new investment service of operating an OTF and the abolition of the local firm exemption. 

4. Senior management arrangements, systems and controls 

Proposals to introduce new management body responsibility and format requirements, and how they would apply to branches of non - EU firms. 

5. Remuneration requirements for sales staff 

Handbook proposals aimed at preventing sales staff from being incentivised to act in ways detrimental to the best interests of customers. 

6. Whistleblowing 

Handbook proposals to introduce a single FCA resource for MiFID II and other domestic whistleblowing guidance. 

7. Client assets 

Minor changes to align client asset rules with MiFID II. 

8. Complaint handling 

Handbook proposals to set out the enhanced complaint handling rules in MiFID applicable to a wider range of clients than currently. 

9. Fees 

Initial and ongoing fees proposal for firms applying to operate an OTF or MTF, and the on - boarding fee for firms connecting to the FCA's Market Data Processor. 

The deadline for responses is 28th October 2016, and a MiFID II policy statement is expected in the first half of 2017. The paper is available to view here.