On November 25, 2016, the PRA launched its second consultation
on implementing certain aspects of the Markets in Financial
Instruments legislative package, which comprises MiFID and the
Markets in Financial Instruments Regulation, collectively known as
MiFID II. The consultation relates to requirements for a firm's
management body and organizational requirements as well as to the
new regulated activity of operating an Organised Trading Facility
and the new financial instrument of "emission allowances"
and structured products. The PRA consulted on its approach to
passporting and algorithmic trading earlier in 2016 and has
published its final rules for those areas. The PRA will consult on
other aspects related to MiFID II in due course.
The governance and organizational requirements of MiFID II are
detailed in a Commission Delegated Regulation on organizational
requirements and operating conditions for investment firms which
the European Commission adopted on April 25, 2016. As a Regulation,
it will apply directly to firms subject to MiFID II across the EU
once it comes into force. The PRA is proposing that its rules in
this regard will be removed from its Rulebook.
The PRA is proposing that the requirements in the Delegated
Regulation be extended to the non-MiFID business of those firms
that are in-scope of MiFID II and is proposing to implement that
approach through changes to its Rulebook. MiFID II introduces a new
regulated activity of operating an OTF (a new type of trading
facility), designates emission allowances as a new class of
financial instrument and imposes new marketing requirements in
relation to structured products, among others. The UK Government is
intending to amend the Regulated Activities Order to transpose
these requirements into UK law and to grant the UK regulators
powers to process applications for variation of permission in
advance of January 3, 2018 (the date from which MiFID II will
apply). Subject to that legislation being finalized, the PRA is
proposing that the transitional measure in the draft UK legislation
be available so that a firm which is already undertaking certain
regulated activities in relation to structured products would only
need to notify the PRA of its wish to carry out those regulated
activities in relation to structured products. The PRA proposes to
direct firms that wish to use the transitional measure to notify
the PRA using the variation of permission form available on its
MiFID II will apply from January 3, 2018. Member states are
required to transpose the requirements into national laws by July
3, 2017. The PRA's proposed rules are expected to apply from
January 3, 2018. Responses to the PRA's consultation are
requested by February 27, 2017.
On March 7, 2017, it will be one year since the U.K. Financial Conduct Authority's senior managers and certification regime came into force, heralding a new era of personal accountability in the financial sector.
On January 31, 2017, the FCA published a final notice issued to Deutsche Bank AG and fined the bank Ł163 million for failing to maintain an adequate AML control framework between January 1, 2012 and...
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