MiFID II – are you ready?

MiFID II – are you ready?

Following nine years of deliberation and a variety of papers on new regulations intended to prevent a recurrence of the problems that resulted in the banking crisis in 2008, MiFID II is almost upon us, coming into being on 3 January 2018. This legislation will affect every financial firm and it is vital, in the last few weeks of 2017, to ensure that your firm is prepared for the changes required. The two key FCA Policy statements alone – PS 17/05 (March 2017) and PS 17/14 (July 2017) comprise over 2,500 pages, before you even think about all the links to other documents that they contain and the numerous commentary and interpretation that has been published in the interim, so it will not be a surprise if firms still have a few things to consider. If you are already sighing with frustration at the thought of ‘yet more regulation’, please take comfort from the fact that UK firms are likely to have far less change as a result of MiFID II compared with firms in the rest of the EU and EEA. A lot of what is in MiFID II is already in place in the UK and our financial regulations are considered to be the gold standard that MiFID II seeks to mirror across the other member states.

There was quite a bit of immediate coverage in the financial press following the publication of the ‘final’ paper in July. ATEB have previously published some articles around aspects such as Legal Entity Identifiers (not strictly a MiFID II initiative but wrapped up within the rules nonetheless) and Telephone recording. However, the problem with some of the early comment that you may have read was that the rules were not all ‘final’ and there are many aspects that were in ‘final’ form but have required further clarification from the FCA. Some of these aspects remain to be clarified and you can rest assured that we will inform our clients as and when we are certain that we have pinned down any aspect that was/is unclear in the rules. Meantime, we have been diligently going through the papers and analysing what they mean for firms generally and ATEB clients in particular. There is now less than a month to go but we wanted to share the results of our analysis in order that firms can consider all the relevant aspects and what action still needs to be taken to be MiFID II ready on 3 January.

The ATEB MiFID II guide

Accordingly, starting today, we will be publishing a series of articles over the coming couple of weeks covering the following topics, each of which will require firms to make changes to the way they have operated in recent years.

  • Independence under MiFID II;
  • Complaints handling;
  • Inducements and Adviser charging;
  • Disclosure;
  • Suitability;
  • Dealing and Managing;
  • Client Agreements;
  • Knowledge and Competence;
  • Product Governance;
  • Structured deposits;
  • Role of the Compliance function in firms.

Important Note

We hope that you will find the articles of interest and value as the 3 January deadline approaches but they can, by definition, only be a high-level summary of the very detailed analysis that ATEB has undertaken on the ‘final’ MiFID II Policy Statement and related papers. The articles are biased towards ‘typical’ ATEB clients and our full analysis will be shared with ATEB clients as part of our ongoing service arrangements.

We aim to remind you of what needs to be considered and point you in the direction of further guidance but cannot cover every MiFID connotation. It does include our interpretation of the requirements, where there is a lack of clarity, and should therefore be used with discretion and read with a questioning attitude.

All firms should read the Policy Statement.

Important Note: ATEB news is intended to provide general information ONLY. The content, including any views expressed or guidance provided, does not replace the need to comply fully with FCA Rules and Guidance. Unless you have discussed news article content with ATEB, and specifically how it relates to your circumstances, then ATEB disclaims all liability and responsibility and actions arising from any reliance placed upon it. For the avoidance of doubt therefore, any reliance you place on such information without our consultation is at your own risk.

ATEB Compliance offers compliance and regulatory advice.

ATEB Suitability provides report writing software for the financial services market.

Our View

MiFID II is a massive piece of regulation and all firms will be affected by it in some way. We hope that the articles we will publish in the next couple of weeks will ensure that firms are fully aware of how the new rules apply to them and help to make any changes required to be MiFID II compliant.

Action Required By You

  • Read the ATEB articles;
  • Action as required;
  • Contact ATEB if you need further clarification or assistance.
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About the Author

Technical Manager - Often referred to as the Oracle or the Sage, Alistair has a wealth of financial services experience. He is our go-to Technical Manager and enjoys nothing more than a complicated conundrum. Feel free to test his renowned knowledge by getting in touch.

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