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The Financial Services Authority today published a Policy Statement and Handbook text that finalises its transposition of the Markets in Financial Instruments Directive (MiFID) for FSA-regulated firms and markets by the EU deadline of 31 January 2007.
The switch-on date for MiFID and the new Handbook text is 1 November 2007, allowing a nine-month period following transposition for financial institutions to complete their plans for implementation of the new MiFID requirements.
FSA Managing Director Hector Sants said:
"Today’s paper marks the culmination of the FSA's work to transpose MiFID on deadline – an achievement which owes a great deal to the co-operation and commitment we have received throughout the process from the industry. We believe we have stuck to our commitment to minimise the burden on firms by adopting a proportionate approach to implementation. As we have already indicated, implementation of MiFID will represent a substantial cost to industry but it does create the potential for revenue opportunities over the longer term, and we would encourage firms to focus on these opportunities."
In today’s Policy Statement, the FSA provides feedback on issues related to MiFID transposition raised by respondents to the following CPs:
- 06/14: "Implementing MiFID for firms and markets" (July 2006);
- 06/19: "Reforming conduct of business regulation" (October 2006); and
- 06/20: "Financial promotions and other communications" (October 2006).
In all three CPs, the FSA’ proposed approach to transposition was:
- to copy-out the relevant MiFID requirements;
- to remove existing provisions that were, as a consequence, considered redundant or unnecessarily prescriptive – reflecting the FSA move towards more principles-based regulation;
- to be sparing in the use of guidance; and
- to retain or add other requirements beyond the MiFID minimum only where necessary for delivery of our statutory market confidence and consumer protection objectives.
This general approach was largely endorsed by the respondents to the CPs, and this is the basis on which MiFID has been transposed.
Background
- PS07/2 'Implementing the Markets in Financial Instruments Directive (MiFID)' is available in the FSA Website.
- To complete the MiFID-related changes to the Handbook, the FSA has also published today a separate Policy Statement PS07/3 'Reforming the Approved Persons Regime. Policy Statement on Section IV of CP06/15: Markets in Financial Instruments Directive' which provides feedback on the relevant parts of CP06/15, 'Reforming the Approved Persons regime'.
- Many respondents to CPs 06/19 and 06/20 addressed both the MiFID transposition proposals and the broader Newcob and financial promotions proposals, consultation on which continues until 23 February 2007. Feedback in PS07/2 on the conduct of business proposals in CPs06/19 and 06/20 is confined to those matters essential for transposition of the relevant MiFID requirements. The FSA is considering the comments on the broader proposals, and will provide feedback on them – together with other responses received by 23 February – in the Newcob PS planned for Q2 2007.
- CP06/14, CP06/19 and CP06/20 are available on the FSA Website.
- The FSA regulates the financial services industry and has four objectives under the Financial Services and Markets Act 2000: maintaining market confidence; promoting public understanding of the financial system; securing the appropriate degree of protection for consumers; and fighting financial crime.
- The FSA aims to promote efficient, orderly and fair markets, help retail consumers achieve a fair deal and improve its business capability and effectiveness.
