The UK financial regulator has issued a third consultation paper on MiFID II and re-stated its position that regulated firms must continue to adopt EU regulation despite the Brexit vote.
The Financial Conduct Authority (FCA) proposes that the MiFID II ban on inducements for independent financial advisers that advise retail clients, be extended to firms that are tied in some way to product providers.
However, the regulator will not extend the MiFID II inducements ban for firms providing advice and portfolio management services to professional clients.
Overall the FCA consultation is to gather comments on changes to the FCA Handbook that are necessary to support MiFID II regulation.
Inducements and costs are two of the topics covered in the MiFID II – or Markets in Financial Instruments Directive II – consultation. Product governance is also covered – a subject not treated in previous FCA MiFID II consultation.
The paper is split into two parts and comments are sought by January 4, 2017, for one part, and by October 31 for Chapter 16, which deals with supervision, authorisation and approved persons.
Andrew Bailey, chief executive at the FCA said: “The changes to rules we are proposing today reflect key themes that we have worked on in both retail and wholesale markets over recent years to promote competition and market integrity.”
In relation to Brexit, he added: “As we said in our statement following the EU referendum result, firms must continue to abide by their obligations under UK law including those derived from EU law. They must continue with implementation plans for legislation that is still to come into effect, of which MiFID II is one such example.”
The consultation paper can be seen here and the MiFID II regime is due to take effect in January 2018.
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