Regulation Tomorrow

The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017

There has been published on the legislation.gov.uk website The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017 (the Regulations)

The Regulations form part of the transposition into UK law of MiFID II and also gives effect to MiFIR.  The structure of the Regulations are as follows:

  • Part 1 of the Regulations designates the FCA, PRA and Bank of England as competent authorities to carry out the duties set out in Titles I to IV, VI and VII of MiFID II and MiFIR;
  • Article 3 of MiFID II allows Member States to choose not to apply the Directive to firms for which they are the home Member State provided their national law imposes certain conditions on those firms. Chapter 1 of Part 2 of the Regulations gives effect to Article 3 and enables investment firms authorised in the UK to be exempt from the requirements of MiFID II, subject to various restrictions;
  • Chapter 2 of Part 2 contains provisions concerning third country firms providing investment services in the EU. These provisions are intended to give effect to the directly applicable rules on such firms in Title VIII of MiFIR (which give access to the UK for such firms if the European Commission decides their home State has a regulatory regime equivalent to the EU’s regime). The FCA is also given powers to intervene in these firms;
  • Part 3 implements Article 57 of MiFID II, which requires Member States to both put in place limits on the size of positions that can be held in commodity derivatives and to enforce position limits put in place by other Member States;
  • Part 4 imposes controls relating to algorithmic trading etc. on certain firms and individuals, such as insurance undertakings, that are otherwise exempt from MiFID II, in order to implement Article 1(5) of MiFID II;
  • Part 5 gives the FCA and PRA powers to remove a person from the management board of an investment firm, credit institution, or recognised investment exchange, for the purposes of MiFID II. This is to implement Article 69(2)(u) of MiFID II (Article 69 lists the supervisory powers competent authorities must have to carry out their duties under MiFID II and MiFIR);
  • Part 6 contains a number of miscellaneous provisions relating to MiFID II and MiFIR, such as duties to inform the European Securities and Markets Authority of certain matters relating to the Directive or Regulation;
  • Part 7 contains further miscellaneous provisions dealing with the transition to the MiFID II and MiFIR regimes, amendments to legislation and the review of the Regulations; and
  • Schedules 1, 2 and 3 contain modifications and amendments to the Financial Services and Markets Act 2000 and secondary legislation made under that Act. These give the FCA and PRA powers to supervise and enforce the Regulations and MiFID II and MiFIR.

Certain aspects of the Regulations come into force on three different dates, 29 June 2017, 3 July 2017 and 31 July 2017. For all other purposes the Regulations come into force on 3 January 2018.

View The Financial Services and Markets Act 2000 (Markets in Financial Instruments) Regulations 2017, 22 June 2017

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