On September 11, the UK Financial Conduct Authority (FCA) published a new webpage with an update on MiFID II notification requirements and procedures for certain MiFID-impacted firms in the UK—specifically systematic internalizers (SIs), providers of direct electronic access (DEA) to EU/EEA markets and algorithmic trading firms.
The stated purpose of the webpage is to provide such firms with a summary of updates concerning MiFID II notifications that the FCA has made since January 2017, when the FCA published its MiFID II application and notification user guide.
Systematic Internalizers: The webpage notes that notification to the FCA is needed when a firm commences activity as an SI in a class of financial instruments. All in-scope firms must monitor their trading levels and calculate whether their activities bring them into the SI regime in the various instruments they trade. When they do so, firms must notify the FCA that they are operating as an SI and in which classes of financial instruments. Firms must also notify the FCA when they cease to be an SI in relation to a particular class or classes of financial instruments. It should be noted that the webpage also states that firms can also “opt in” to the SI regime by notifying the FCA that they will operate as an SI in a particular class of financial instrument —even where they do not exceed the pre-defined MiFID II thresholds.
DEA Providers and Algorithmic Trading Firms: Authorized firms, and certain firms exempt from MiFID II, must notify the FCA if they are providing DEA or undertaking algorithmic trading under MiFID II. The FCA notes that its Electronic Trading Notification form will need to be filed and existing regulated firms may need to amend their current filings with the FCA to obtain access to the form.
The FCA has also published a guide to assist firms submitting systematic internalizer notifications and electronic trading notifications.
The webpage also amends an error in the FCA’s application and notification user guide, clarifying that firms are not required to inform the FCA if they act as a general clearing member.