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Markets and Securities Services | Issue 46
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The proposals in CP16/19 cover:
• Delegation of safekeeping duties to a
third-party.
• Depositing client money in a group bank.
• Taking collateral when arranging
securities lending.
• Custody liens.
• Maintaining a single rulebook.
• Prohibition on Title Transfer Collateral
Arrangements (TTCAs) with retail clients.
• Express consent from clients when
depositing money in a QMMF.
• Inappropriate use of TTCAs.
• Preventing unauthorised use of client assets.
• Internal firm assessments when
depositing client money in a qualifying
money market fund.
• MiFID II requirements already implemented.
Complaint-handling (Chapter 8)
This chapter is of relevance to consumers
and regulated firms.
The FCA proposes to implement the
requirements of MiFID II in relation to
complaint-handling by amending the Dispute
Resolution: the Complaints sourcebook (DISP).
It proposes to create a new definition for “MiFID
complaint” covering those complaints that are
subject to the new MiFID II complaint-handling
requirements. It also proposes a new section,
DISP 1.1A, which sets out the provisions that
apply to relevant firms when handling MiFID
complaints, such as those in MiFID II.
The FCA proposes using a copy-out approach
to incorporate the complaint-handling
requirements from Article 26 of the MiFID II
(Delegated Regulation) into DISP 1.
FCA description of implications for firms in CP16/19
The FCA does not believe that most of its
proposals will have a material impact on firms,
given that it is applying largely the same
requirements that currently exist.
Extending complaint record-keeping and reporting
requirements to complaints from professional
clients might have some (small) cost implications.
In line with the requirements of MiFID II, the FCA
has extended the jurisdiction of the Financial
Ombudsman Service to complaints about sales
of and advice in relation to structured deposits
and added an additional rule requiring branches
of UK MiFID investment firms to adhere to the
relevant Alternative Dispute Resolution (ADR)
entities in each of the relevant EEA States in
which they are established. These changes might
result in additional costs to firms, but the FCA
does not have any relevant data on these points.
Whistleblowing (Chapter 9)
Of relevance to investment firms and branches
of non-EEA firms providing investment services.
The FCA does not think that it can create a “common
platform” of whistleblowing requirements across
various pieces of EU and UK legislation.
The FCA proposes two options in CP16/19, but
its preference is a new Handbook chapter/
subchapter to act as a single “home” for all the
various whistleblowing requirements, which
would include separate rules implementing each
EU whistleblowing obligation requiring Handbook
implementation and include (or at least
reference) each domestic FCA whistleblowing
rule. To implement this the FCA proposes a new
section in SYSC to bring together domestic and
EU whistleblowing requirements.
Fees manual (FEES) (Chapter 10)
This is of relevance to operators of OTFs,
MTFs, DRSPs and those applying for VoPs.
Also firms connecting to the FCA’s market
data processing system (MDP).
This section of CP16/19 sets out the main fees
implications of MiFID II. In the first part of the chapter,
the FCA sets out proposals for consultation being:
• Fees for operators of OTFs and clarification
of charge for variations of permission (VoPs)
by operators of OTFs and MTFs and firms
undertaking new regulated activities in
structured deposits.