FCA boss: Firms are prepared for ‘massive undertaking’ of Mifid II

Bailey-Andrew-2012-700x450.jpgFCA chief executive Andrew Bailey has shared some signs of relief over the impact of new European regulations on UK companies as he finds no immediate market disruptions for the main asset classes.

In a speech at the International Capital Market Association today, Bailey said Mifid II, which came into force on 3 January, was well received by most firms despite the regulation being “a massive undertaking”.

Even if it is early days to paint the full picture on the effects of Mifid II, Bailey said: “Wholesale firms made a very significant effort to prepare for the implementation of Mifid II, for which many thanks. I know that this comes with a cost.

“Despite some inevitable roughness around the edges, the preparations paid off with no major operational disruptions to trading – and evidence that the changes have not adversely affected liquidity across equities, bonds and derivatives.”

However, Bailey said firms might need to do more about the implementation of some of the rules, particularly around reporting.

He said: “We expect firms to be working to tackle issues and we also recognise that there remain some important interpretative issues to address.”

Mifid II aims at enhancing transparency and investor protection, but the FCA has noted the complexity and challenge of transaction reporting, which has been widely debated in the past month.

The FCA estimated that under the new regulation there will be up to 15 million more transaction reports a day, compared to the pre-Mifd II period.

Bailey said: “The volume of reports reflects the role of London as a global financial centre. There is a determination on our part to exploit the full possibilities of these data to support our efforts to deter, detect and punish market abuse.”

On the effects on markets, Bailey said there have been no disruptive effects on bonds, although the recent volatility might have skewed any possible spread moves.

He added: “We have seen a pronounced downturn in OTC equity trading, as expected. There have been delays in introducing some of the planned measures, notably the double volume cap which limits dark trading. I have no doubt that across the EU, the data systems will get up to speed and enable this to happen and I am relaxed that it will happen robustly without disrupting markets. The European Securities and Markets Authority has said it will happen in March.”

Recommended

Tapering of annual allowance – adjusted and threshold income

The definitions of adjusted income and threshold income used to determine whether, and to what extent, someone’s annual allowance will be reduced can be confusing.  Here we try to make sense of it all. The annual allowance will be reduced for high income individuals from 6 April 2016.  Our previous article Tapering of annual allowance […]

Hourglass-Clock-Time-Race-Measure-700x450.jpg

Advisers hit out at £49 suitability report writer with ‘no IFA input’

Advisers have hit out at a service offering suitability letters from as low as £49 with “no input” from the IFA. Just Reasons Why Letters is marketing itself as the “UK’s only 100 per cent ‘done for you’ suitability report writing service”. IFAs send JRWL the information they need to produce a report. The service […]

MM-AutumnBudgetBanner
3

Lifetime allowance 2018/19 increase confirmed but pensions absent

The Government has confirmed that the lifetime allowance 2018/19 will rise in line with inflation, but savers have been offered little else in the Autumn Budget. The lifetime allowance will increase from £1m to £1,030,000 to match CPI from 2018/19.  Though the maximum amount the can be saved each year into a Junior Isa or […]

Gregg McClymont 480
1

Gregg McClymont: Why I need a financial adviser

Combining risk frameworks with appropriate asset allocation is no mean feat Economists call them “teachable moments”. A life event which make us think more about long-term financial planning. Until my 40th birthday, I barely thought of my mortality. But since then I have barely thought of anything else. A major birthday milestone combined with the arrival […]

A modern horror story

Every day a quick scan of the news reveals some new horror that will change the lives of those involved forever – the unlucky accident on the way to work, a tragic illness that cuts a young life short or the holiday accident that leaves more than just a scar to cope with. We barely […]

Newsletter

News and expert analysis straight to your inbox

Sign up

Comments

    Leave a comment