This Prudential Regulation Authority (PRA) policy statement (PS) provides final policy as part of the PRA’s transposition of the Markets in Financial Instruments Directive II (MiFID II) following Consultation Paper (CP) 43/16 ‘Implementation of MiFID II: Part 2’. This is part of a legislative package, comprising the Directive, MiFID II (2014/65/EU); the Markets in Financial Instruments Regulation (2014/600/EU) (MiFIR); and Commission Delegated Regulation on organisational requirements and operating conditions (the ‘Delegated Regulation’). In the interests of a coherent approach to corporate governance, these MiFID II requirements are aligned, as far as possible, to requirements under CRD IV.
This PS is relevant to banks, building societies, PRA-designated investment firms and their qualifying parent undertakings, which for this purpose comprise financial holding companies and mixed financial holding companies, as well as credit institutions, investment firms and financial institutions that are subsidiaries of these firms.
Feedback on consultation responses
The PRA received no responses to CP43/16. The final rules are as consulted, with some minor drafting changes to the instruments to clarify language, correct formatting and referencing (see Appendices 1-4). Appendices 5-7 include links to three supervisory statements (SSs). The three SSs have been updated to refer to MiFID II where previously they referred to MiFID I, and associated implementing directives.
MiFID II will apply from Wednesday 3 January 2018 and Member States must transpose their provisions in national legislation and regulations by Monday 3 July 2017. The PRA’s rules, and the relevant sections of the SSs that apply to MiFID II, (Appendices 1-7) will take effect from Wednesday 3 January 2018.
Chapter 2 outlines the implementation arrangements for:
- granting authorisations in respect of a new MiFID investment activity, ‘operation of an organised trading facility (OTF)’, a new MiFID financial instrument ‘emission allowances’, and regulated activities of dealing, advising, managing and arranging structured deposits. Firms should submit complete applications for variation of permission by 3 July 2017; and
- notification to the PRA for firms wishing to carry out the following activities: Structured deposit in respect of the regulated activities; Dealing in investment as principle; Arranging deals in investment; Making arrangements with a view to transactions in investment; Managing investments; and Advising on investments.
Further information is available on the authorisations ‘Variation of permission’ webpages – see Related Links.