The Financial Conduct Authority (FCA) has launched a consultation on MiFID II.

By way of a reminder, the MiFID II Directive (2014/65/EU) will replace (in tandem with the Markets in Financial Instruments Regulation) the Markets in Financial Instruments Directive (2004/39/EC). MiFID II is scheduled to come into effect on 3 January 2017. MiFID II will provide a revised legal framework relating to the regulation of firms providing investment services or activities in the EU.

HM Treasury had consulted in March 2015 on most of the changes to UK legislation required to implement MiFID II. At the same time, the FCA published a discussion paper about the issues where it had discretion in implementing MiFID II. Because the FCA cannot consult on the full range of changes needed to its Handbook until it has greater clarity on the MiFID II implementing legislative measures, it has decided to consult in stages. Accordingly, this first consultation paper considers the issues related to the FCA’s regulation of the secondary trading of financial instruments. This includes issues related to trading venues (including the new category of venue, the Organised Trading Facility), systematic internalisers, waivers and deferrals for trade transparency, algorithmic and high frequency trading and market data.

The current consultation affects a wide range of FCA regulated firms, including investment banks, investment managers, inter-dealer brokers, firms engaging in algorithmic and high-frequency trading, trading venues, and prospective data reporting service providers.

Submissions should be sent to the FCA by 8 March 2016.

The FCA intend to publish at least one further consultation paper on MiFID II, covering other issues including conduct of business, in the first half of 2016.