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FCA Releases MiFID II Markets Consultation - Industry Still in the Dark Regarding Final Rules on Conduct

December 2015

The Financial Conduct Authority (FCA) this morning released the first of two consultation papers on the UK's implementation of the revised Markets in Financial Instruments Directive (MiFID II). The consultation paper covers issues related to the secondary trading of financial instruments.

Michael Thomas, partner in Hogan Lovells financial institutions group, said:

"It's disappointing that delays at the European level have meant that we're still uncertain as to the detail of MiFID II on conduct issues. The FCA originally thought that it would be able to consult on conduct this month; this was pushed back to January 2016, then March 2016, and now it looks as if the next consultation will not be published until after March."
The consultation paper released today covers issues related to the secondary trading of financial instruments, including:

• changes to the requirements for trading venues and systematic internalisers;
• pre-trade and post-trade transparency;
• data reporting services;
• algorithmic and high-frequency trading requirements;
• passporting and UK branches of non-EEA firms;
• amendments to the FCA Principles for Business; and
• changes to FCA perimeter guidance.

The FCA's consultation does not cover conduct of business requirements, because the European Commission has not yet adopted the delegated acts that contain the bulk of the MiFID II measures on these requirements. The delegated acts were originally scheduled for publication in summer 2015.

Notes for editors:

On Wednesday 16 December 2015, the FCA published its Markets in Financial Instruments Directive II Implementation Consultation Paper I (CP15/43). The Consultation Paper is based on the draft technical standards that were produced by the European Securities and Markets Authority (ESMA) in September 2015, and which are awaiting adoption by the European Commission.

At present, the text of the MiFID II Directive states that it will take effect from 3 January 2017. Steven Maijoor, chair of ESMA, made a statement on Tuesday 10 November regarding potential delays to the implementation of MiFID II.  It is now expected that the implementation of MiFID II will be delayed until January 2018.

For further details on MIFID II, please visit the Hogan Lovells dedicated microsite at http://www.hoganlovells.com/mifidii/.

The team

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