News and Views MiFID II Special Edition 2016

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Global Trustee and Fiduciary Services News and Views | MiFID II Special Edition 2016 59
standards based on the higher standards. The FCA
will consider further whether it needs to make
specific proposals to support this.
Third-country firms
In CP16/19.14 the FCA discussed its approach
to implementing MiFID II for branches of non-
European Economic Area firms (third-country
firms). It said it would apply the same conduct rules
to these firms as it does to MiFID investment firms
to ensure they are treated no more favourably than
branches of EEA firms. The conduct proposals in
this CP for MiFID investment firms therefore also
apply to branches of third-country firms.
EU legislation and the Handbook
A significant part of the conduct rules in MiFID II
are regulations that are directly applicable. In light
of the links between the MIFID II provisions and
the delegated regulation, and the use that a wide
range of firms make of COBS, the FCA proposes
to copy out various conduct provisions in the
delegated regulation into the Handbook.
In drafting the Handbook, the FCA has also
decided that the clearest approach is to have
separate chapters for MiFID and non-MiFID
business in some cases.
Under Article 4 of the MiFID implementing
directive, Member States were able to impose
additional requirements to those under MiFID
in certain circumstances. The UK has made a
number of “Article 4” notifications to do this.15
MiFID II allows certain additional requirements
that have been notified to the Commission under
MiFID to be retained, and allows, in more limited
circumstances than under MiFID, Member States
to notify new additional requirements.
Wider UK implementation of MiFID II
The implementation of MiFID II also involves
changes to UK legislation and changes to the
rules of the PRA. The proposals in this CP
are based on the draft statutory instruments
that HMT published in its March 2015 CP
and both the drafting and the policy may be
subject to change. The PRA will publish in due
course a Policy Statement that follows the
policy proposals in its CP9/16, which covered
passporting and algorithmic trading.
Finalising transposition
As part of its transposition work, the FCA
continues to analyse all the consequential changes
that need to be made within the Handbook. The
FCA thinks this work will lead to issuing a further
consultation later this year.
1 See ,
last downloaded on 29 September 2016.
2 See
43.pdf, last downloaded on 29 September 2016.
3 See
last downloaded on 29 September 2016.
4 COBS 11.6.
5 COBS 2.
6 See
final-report.pdf, last downloaded on 29 September 2016.
7 See
amending-the-definition-of-financial-advice-consultation,
last accessed on 29 September 2016.
8 See
PDF/?uri=CELEX:02004L0039-20110104&from=EN, last
accessed 29 September 2016.
9 See
papers/dp15-03.pdf, last downloaded on 29 September 2016.
10 COBS 18.
11 Paragraphs 1.17 to 1.23.
12 These are firms that are providing investment advice and/
or receiving and transmitting client orders in relation to a
restricted range of financial instruments but that do not hold
client assets or money and do not do business outside the UK.
13 Listed in Article 3(2)(a) to (c) of MiFID II.
14 Paragraphs 1.13 to 1.16
15 See
implementation/index_en.htm, last accessed on 29
September 2016.
The FCA will publish a further CP on the
other Handbook changes required to
implement MiFID II.
The FCA will publish a policy statement covering
all aspects of its implementation of MiFID II in the
first half of 2017.
Next steps
Amanda Hale
Head of Regulatory Services
Trustee and Fiduciary Services
Citi
Comments are to be provided to the FCA
by 4 January 2017, except for Chapter
16, Supervision (SUP), authorisation and
approved persons, where responses should
be provided by 31 October 2016.
The FCA will then consider firms' feedback
and publish its rules in a Policy Statement in
the first half of 2017.