On Friday the Financial Services Authority (FSA) published a Policy Statement and Handbook that it says finalises its transposition of the Markets in Financial Instruments Directive (MiFID) for FSA-regulated firms and markets by the European Union deadline of 31 January 2007.
The start-date for MiFID and the new Handbook text is 1 November 2007, allowing a nine-month period following transposition for financial institutions to complete their plans for implementation of the new MiFID requirements.
“Today’s paper marks the culmination of the FSA’s work to transpose MiFID on deadline – an achievement which owes a great deal to the co-operation and commitment we have received throughout the process from the industry,” says FSA Managing Director Hector Sants. ” We believe we have stuck to our commitment to minimise the burden on firms by adopting a proportionate approach to implementation. As we have already indicated, implementation of MiFID will represent a substantial cost to industry but it does create the potential for revenue opportunities over the longer term, and we would encourage firms to focus on these opportunities.”
In today’s Policy Statement, the FSA provides feedback on issues related to MiFID transposition raised by respondents to the following CPs:
06/14: “Implementing MiFID for firms and markets” (July 2006);
06/19: “Reforming conduct of business regulation” (October 2006); and
06/20: “Financial promotions and other communications” (October 2006).
In all three CPs, the FSA says its proposed approach to transposition was:
to copy-out the relevant MiFID requirements;
to remove existing provisions that were, as a consequence, considered redundant or unnecessarily prescriptive – reflecting the FSA move towards more principles-based regulation;
to be sparing in the use of guidance; and
to retain or add other requirements beyond the MiFID minimum only where necessary for delivery of our statutory market confidence and consumer protection objectives.
This general approach was largely endorsed by the respondents to the consultation papers, says the FSA, and this is the basis on which MiFID has been transposed. To complete the MiFID-related changes to the Handbook, the FSA has also published today a separate Policy Statement PS07/3 Reforming the Approved Persons Regime: Policy Statement on Section IV of CP06/15: Markets in Financial Instruments Directive which provides feedback on the relevant parts of CP06/15, Reforming the Approved Persons regime.