PRA has published its first consultation on how it will change its rules to implement MiFID 2. The consultation covers two areas:

  • passporting: PRA comments that the wider scope of services and activities (specifically, operating an organised trading facility) and investments (specifically, emission allowances) will allow both investment firms and credit institutions to extend their passports. It notes the changes it will make to its forms for investment firms to use so its rules will link to the forms ESMA has provided in RTS. It notes that credit institutions, while still largely using the EBA forms for MiFID passports, will need to comply with the MiFID 2 rules in respect of passporting of tied agents; and
  • algorithmic trading: PRA proposes a new part for its rulebook dealing with firms that engage in algorithmic trading and provide direct electronic access to trading venues. It also reminds them many other parts of the rules relating to systems and controls, compliance and organisational requirements will apply.

PRA will consult further on other necessary changes to its rules, and may need to change these proposals depending on the final text of EU measures, but wanted to provide some clarity for firms. See further our detailed summary. PRA asks for comment by 27 May. (Source: PRA consults on MiFID 2 implementation)