56 / 72
Markets and Securities Services | Issue 46
54
The CP follows on from two previous
consultation papers, CP15/43
2
and CP16/19
3
,
and is split into two parts:
•
Part I
deals with conduct of business issues.
• And
Part II
deals with other matters,
covering a range of issues not covered in the
FCA’s previous two CPs, including product
governance and additional perimeter guidance.
Strengthening investor protection is one of the
key aims of MiFID II, and the changes to the
conduct rules between MiFID and MiFID II pick
up on several of the themes of the FCA’s recent
work in the UK on retail and wholesale conduct
issues, such as those highlighted below.
Who does this consultation affect?
This consultation affects a wide range of firms
authorised and recognised by the FCA (as well
as unregulated entities trading commodity
derivatives), but particularly those shown in the
diagram opposite.
Summary of proposals
In this CP, the FCA seeks views on the proposed
changes to the Handbook in the areas below,
several of which reflect feedback they received
to DP15/3.
Part I: conduct of business
Inducements (including adviser charging)
The FCA’s general approach is to implement
the MiFID II provisions for MiFID business and
FCA’S MIFID II IMPLEMENTATION:
CONSULTATION PAPER III (CP16/29)
This consultation paper (CP) forms part of the Financial Conduct Authority’s
process to make necessary changes to its Handbook in order to implement
the Directive on 3 January 2018.
1
Introducing the
concept of independent
investment advice and
requirements for firms
to ensure employees
providing investment
advice have the
necessary knowledge
and competence.
These are similar to
the requirements of
the Retail Distribution
Review (RDR).
New product
governance
requirements that
cover similar ground
to the FCA guidance
on the responsibilities
of providers and
distributors for the fair
treatment of customers
and to points raised
in recent thematic
reviews.
New rules on
inducements and the
receipt of research
that will strengthen
transparency and
controls by investment
firms over costs of
third-party research.
This will deliver better
outcomes for investors
in line with the FCA's
work and publications
on the use of dealing
commission since 2012,
including the FCA
review in 2013/2014.
Enhanced rules on best
execution, which will
help to address some
of the issues the FCA
identified in its 2014
thematic review of
firms' implementation
of the existing rules.