As the Markets in Financial Instruments Directive (MiFiD II) will come into effect in the beginning of next year, there are some important changes to financial services regulation in the United Kingdom which is exiting the EU. In a statement published on Monday, the Financial Conduct Authority (FCA) encourages firms carrying out activities covered by MiFID II, to submit applications for MiFID II authorization by 3 July 2017.
Such applications for authorisation or a variation of permission are regulated in Part 4A of the Financial Services and Markets Act 2000 (FSMA). Apart those, the MiFiD II implementation also involves a number of transaction reporting requirements and other wide-ranging measures designed to improve investor protection and promote market integrity. Also, certain binary options will be regulated by the FCA instead by the Gambling Commission.
“We expect firms to be busy considering what impact MiFID II will have on their business and to act accordingly,” says the FCA in the statement.
The UK financial watchdog warns companies that if they carry on MiFiD II regulated activities in the country without the authorizations due, they may face civil, regulatory and/or criminal consequences. Besides, the announcement on FCA’s website directs to a special user guide with step-by-step instructions.
Now that the UK won’t be a part of the EU, the legislation has been revised and packaged into MiFID II. The Directive will only apply in the UK, but of course the most affected companies will be those operating in the UK, as they will have to comply with the new regulations stated above. Probably some of them will decide to pack and leave, moving to a country with a more favorable climate for forex and binary options brokerages.