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FCA sets out enforcement stance for firms unprepared for Mifid II

FCA logo glass 620x430Regulator will take a different view of firms that have “deliberately flouted” the EU directive

The FCA will not take enforcement action against firms that do not meet all Mifid II requirements by the day it comes into force where they can show they have taken steps to comply with the regulation.

In a speech at the AFME European Compliance and Legal Conference yesterday, FCA enforcement and market oversight executive director Mark Steward acknowledged the market is keen to know what the FCA’s enforcement approach will be for firms that have not completely transitioned to Mifid II by 3 January 2018.

Steward said: “As always, we intend to act proportionately. In this context, this means we will not take a strict liability approach especially given the size, complexity and magnitude of the changes that are required to be in place.”

He said: “We are very aware of how much work many firms have been engaged in for a very long time now in re-tooling and preparing for next year.”

Steward adds: “This means we have no intention of taking enforcement action against firms for not meeting all requirements straight away where there is evidence they have taken sufficient steps to meet the new obligations by the start-date, 3 January 2018.”

He said firms should feel “assured and confident” they can continue to work with the regulator to be ready for Mifid II.

He added: “At the same time, we cannot create a floor for compliance below the required Mifid II standards and so our disposition is likely to be different where firms have made no real or genuine attempt to be ready or where key obligations are deliberately flouted.”

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Comments

There are 3 comments at the moment, we would love to hear your opinion too.

  1. Very pragmatic approach

  2. Cap duly doffed to a very sensible and appropriate stance, hopefully this will be adopted more widely.

    Perhaps we can put “shoot first and ask questions later” behind us?

  3. There are still some issues to be resolved especially relationship between DFMs and IFA firms.

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