FIA has responded to a consultation paper from the UK's Financial Conduct Authority (FCA) on the implementation of MiFID II, entitled Markets in Financial Instruments Directive II Implementation - Consultation Paper I (December 2015 - CP 15/43). The FIA response paper sets out recommendations which the Association believes would assist the UK market in understanding and implementing the requirements set out in MiFID II. While agreeing generally with many of FCA's proposals in the CP, FIA took the opportunity to raise some high level points that members feel are important in the wider context. These include:
- FIA recommends that FCA's amendments to the Handbook not go beyond those requirements included in MiFID II to avoid detrimental 'gold-plating' of requirements contained therein and maintain the utility of exemptions included in MiFID II;
- The REC Handbook should be amended to make clear that the proposed provision at REC 2.5.1(10)(a) does not apply in circumstances where a third country firm exclusively provides services to non-EU clients;
- Any further guidance produced by ESMA should be incorporated into the relevant sections of the Handbook in as similar language as possible to avoid differing interpretations being given to national implementation measures;
- FCA should continue engaging with ESMA and trading venues in order to understand how best to set the relevant thresholds for pre- and post-trade transparency. In addition, it would be useful if FCA could provide practical guidance related to the periodic assessments of transparency calculations in relation to existing deferrals.
