CESR Level 3 recommendations on the list of minimum records in Article 51(3) of the MiFID Level 2 Directive
On 20 October 2006 the Committee of European Securities Regulators (CESR) published a consultation paper regarding its proposed recommendation of a list of minimum records that Member State competent authorities are required to develop in accordance with Article 51(3) of the MiFID Level 2 Directive.
CESR has now published its recommendation which sets out the content of the list of minimum records that Member State competent authorities need to draw up in accordance with Article 51(3) of the MiFID Level 2 Directive. CESR has also published a Feedback Statement. This summarises the main comments received together with some explanations of CESR’s final approach to some of the most significant issues raised in the consultation.
CESR advises that Member State competent authorities may add other record keeping obligations to the list. At the moment CESR is attempting to reach progressive convergence on the basis of the proposed list of minimum records. It is not, at this stage, proposing to harmonise the content, timing or form of the different records on the list. During 2008 CESR will conduct a further review of convergence in this area.
CESR's Level 3 guidelines and recommendations on the publication and consolidation of markets data
On 20 October 2006 the Committee of European Securities Regulators (CESR) published a consultation paper on its proposed recommendations and guidelines on the publication and consolidation of MiFID market transparency information.
CESR has now published its recommendations and guidelines on the requirements for the publication and consolidation of market information under the Markets in Financial Instruments Directive (MiFID). CESR has also published a Feedback Statement. This sets out CESR’s views on the most important points that arose from the consultation and explains the most significant changes to the final guidelines and recommendations. Each section of the guidelines and recommendations is divided into an introductory text which explains the issues and CESR’s thinking and reasoning behind establishing a certain guideline or recommendation followed by the actual Level 3 guidance or recommendation.
CESR’s guidelines and recommendations do not constitute European Union legislation and will not require national legislative action. CESR members are to apply the guidelines in their day to day regulatory practices on a voluntary basis. CESR notes that there is a general commitment by all its members to consider that investment firms, regulated markets and MTFs would fulfil their requirements when following the CESR guidelines.
New Commission website to answer stakeholder questions on MiFID
The European Commission has set up an interactive website where firms can ask questions relating to the Markets in Financial Instruments Directive and its implementing measures. The website will also allow firms to see the answers to questions already asked.
MiFID Product Outline - Leading Solutions for a Pan-European Market
The London Stock Exchange has published a consultation paper on the services that it plans to offer member firms to assist in their compliance with the Markets in Financial Instruments Directive. The consultation paper looks at: (1) Pre-trade transparency. (2) Post-trade transparency. (3) Data and best execution analysis.
Financial regulation: Myth and reality
In his speech at the British American Business London Insight Series and Financial Services Forum, Callum McCarthy (Chairman, FSA) discusses principles based regulation and light touch regulation.
FSA fines Nationwide £980,000 for information security lapses
The FSA has published the Final Notice in relation to the fine of £980,000 that it imposed on the Nationwide Building Society (Nationwide) for not having adequate systems and controls to manage its information security risks. This stems from the theft of a laptop from a Nationwide employee's home last year, where Nationwide’s lack of security procedures and controls came to light.
FSA fines investment firm £10,500 for the failings of its subsidiary
The FSA has published the Final Notice in relation to the fine of £10,500 that it imposed on Trigon Pensions Limited (Trigon) for failing to monitor advisers effectively at its appointed representative, Trigon Financial Services (TFS). The FSA found that TFS did not record sufficient customer information and was unable to demonstrate the quality of the advice that was given. The FSA also found that TFS failed to implement and follow an adequate Training and Competence scheme for advisers and its suitability letters were inadequate.
The FSA reported that Trigon’s failures mirrored some of the main failings that were found in its investment quality of advice process work which was published in July 2006. This work found that the key areas that firms needed to address included Training and Competence, the production of clear suitability letters and controls for monitoring the advice process.
Jonathan Phelan (head of retail enforcement at the FSA) stated:
“We would urge any firms that have seen this case and haven’t reviewed these areas to do so to prevent the need for us to take similar action against them. A firm’s management is responsible for ensuring that it follows FSA rules and we will take appropriate action from the various supervisory and enforcement tools we have available where failings are found.”