The FCA has published a speech by Megan Butler, Executive Director of Supervision – Investment, Wholesale and Specialists in which she said that the regulator has no intention of taking enforcement action against firms for not meeting all the Markets in Financial Instruments Directive (MiFID II) requirements straight away provided there is evidence they have taken sufficient steps to meet the new obligations by the start date and there are plans in place to complete the process. The regulator acknowledges that research continues to pose a challenge and there is also a question mark over firms registered as broker dealers in the US and elsewhere who can’t accept payment for research without applying to become an investment advisor. With regard to this latter point it is in close contact with EU and US colleagues to find a solution.
Meanwhile Steven Maijoor, the ESMA chair, told the Reuters Financial Regulation Summit that while there might be some glitches following the 3 January 2018 implementation date, ESMA was not planning for chaos. He stated that it would be for national regulators to deal with violations in implementation.
Mr Maijoor said that ESMA has been assessing the impact of a possible ‘hard’ Brexit on the EU’s securities market stability more generally and particularly at the issue of UK credit rating agencies and trade repositories who want to have the ability to continue with their services in the EU post-Brexit (EU27). He said that those that already have a legal base in EU27 would not necessarily have to apply for a new licence but would have to spell out which systems and people they would move from the UK.