Important Note

This is a summary of detailed analysis that ATEB has undertaken of the requirements detailed in the MiFID II Policy Statement. Our full analysis will be discussed with ATEB clients as part of our ongoing service arrangements.

This article is one of a series. It is biased towards ‘typical’ ATEB clients. It is a very high-level summary and does not therefore 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.

Accessing the FCA Handbook

We do not replicate FCA rules in this article, but refer to them. The made rules are contained in the annex to the Policy Statement but to access the relevant rules as they will be in their final context, you will need to forward date the FCA handbook. To do this:

•  Go to the FCA Handbook;
• Click on ‘Show Timeline’;
• Select a date well into 2018; 
• Access the relevant handbook

Complaints handling under MiFID II

The FCA consulted about the proposed changes to MiFID complaint rules in CP16/19 and CP 16/43 and published its Policy Statement PS 17/14 earlier this year. 

For non-MiFID business (including firms with an Article 3 Exemption) the good news is the rules that apply to complaints are unchanged.

There is an amended definition of a complaint, which is:

 ‘any oral or written expression of dissatisfaction, whether justified or not, from, or on behalf of, a person about the provision of, or failure to provide, a financial service or a redress determination, which alleges that the complainant has suffered (or may suffer) financial loss, material distress or material inconvenience.’ 

For MiFID business the new complaint handling requirements apply not just to retail clients but also to professional clients and eligible counterparties. However, access to the Financial Ombudsman Service will still be limited to eligible complainants which are, primarily, retail clients and some small businesses.  

The following is a very brief summary of the complaints handling rules for MiFID complaints (DISP 1.1A). 

• A MiFID firm must establish a Complaints Management Function (CMF) that has responsibility for investigating complaints;
  
• Complaints process should be published and include information about the Financial Ombudsman Service (FOS) and its website;
• A firm must establish, implement and maintain effective and transparent complaints management policies and procedures for the prompt handling of clients’ or potential clients’ complaints;
• Complaints must be investigated free of charge, competently, diligently and impartially, obtaining additional information as necessary;
  
• There are rules about the final response that includes enclosing the FOS explanatory leaflet and what to do if dissatisfied with the outcome;
• MiFID complaint resolution rules are very similar to those already in existence for non-MiFID firms with the main difference that the complainant must be informed in the final outcome letter that ‘they may take civil action’ in addition to referring to FOS;
• Firms will have to provide data to the relevant regulator.