The FSA has today published its much anticipated consultation papers:

These documents run to over 800 pages and include an entirely new Conduct of Business Rulebook (NEWCOB). Key points to note are that:

  • NEWCOB will be relevant to a much wider range of firms/activities than some may have anticipated. NEWCOB will implement MiFID but the FSA is also consulting (in two parts) on the application of NEWCOB to firms/activities outside the scope of MiFID, such as those involved with life assurance. Changes in relation to complaints have broader application.
  • FSA faced enormous industry resistance to its initial suggestions about MiFID best execution rules. It has now concluded that those rules have much narrower scope; firms in dealer/OTC markets will be able to offer or quote prices to retail and wholesale clients without providing a best execution service (providing this is made clear to clients). FSA’s earlier proposals for delivering best execution through "benchmarking" therefore cease to be relevant.
  • The consultation on MiFID implementation is very short; it will close in four weeks time on 28th November. Consultation on other aspects runs until 23rd February 2007. There will be a further consultation on non-MiFID firms/activities in Q2 2007 (with a transitional period for some aspects).

We are analysing the CP and draft rules and holding seminars during November. We will be publishing further Law-Nows on the following subjects:

  • Scope of the new rules and revised structure of the rulebook. Which firms/activities are subject to which rules/changes – the timetable for non-MiFID changes.
  • Client take-on under NEWCOB – client categorisation and client agreements.
  • Communications and promotions under NEWCOB
  • Advice and portfolio management under NEWCOB
  • Non-advised sales under NEWCOB
  • Dealing, managing and investment research under NEWCOB
  • Product information under NEWCOB
  • Specialist regimes - the trustee firms’ regime, Energy and oil market participants/activity, corporate finance, stock lending and venture capital, and Retail Securitised Derivatives (RSDs) regime
  • Other aspects of NEWCOB - reporting to clients, insurance mediation (life), claims handing for long-term care insurance, with-profits and pensions.
  • Changes beyond NEWCOB – including the changes to dispute resolution in DISP, which will be relevant to a broad range of firms handling retail business.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 31/10/2006.