The PRA has published Policy Statement 9/17: Implementation of MiFID II – Part 2 (PS9/17).
In PS9/17 the PRA sets out its final policy as part of the PRA’s transposition of MiFID II following Consultation Paper 43/16: Implementation of MiFID II – Part 2 (CP43/16). The PRA reports that it received no responses to CP43/16 and therefore the final rules are as consulted on, with some minor drafting changes to the instruments to clarify language, correct formatting and referencing. The PRA has also updated three Supervisory Statements so that they refer to MiFID II (and the associated implementing Directives) where previously they referred to MiFID I.
The PRA reports that it has adopted an intelligent copy out approach to MiFID II transposition by:
- introducing new PRA rules to implement Articles 9 and 16 of MiFID II which relate to the management body and organisational requirements respectively;
- deleting the PRA rules that are superseded by the provisions set out in the Commission Delegated Regulation on organisational requirements and operating conditions (MODR) as they are directly applicable;
- extending the application of the MODR to the non-MiFID business of MiFID investment firms and MiFID and non-MiFID business of firms subject to the Capital Requirements Regulation, as a matter of domestic policy, to continue to give effect to the common platform approach adopted by the PRA;
- consequential changes to the PRA Rulebook;
- receiving notifications and granting authorisations in respect of dealing, advising, managing and arranging structured deposits; and
- consequential amendments under the General Provisions Part and the Glossary of the PRA Rulebook.
The PRA also sets out final rules regarding the granting of authorisations in respect of the 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. The PRA will proceed with its proposed approach to processing variations of permissions (VoPs), and for notifications made in relation to structured deposits.
The power for the PRA to consider complete applications for VoPs for firms that wish to add these activities and investment types to their Part 4A permission in advance of 3 January 2018 has been granted by HM Treasury in the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017. The PRA states that firms should submit complete applications for variation of permission by 3 July 2017.
HM Treasury has provided the PRA with a power of direction so that a firm that gives the PRA notice (in such form as the PRA directs) before 3 January 2018, that it wishes to carry out the following activities: structured deposit in respect of regulated activities; dealing in investments as principal; arranging deals in investments; making arrangements with a view to transactions in investments; managing investments; and advising on investments, may do so by submitting the form at Notifications 12.1. When the PRA acknowledges receipt of the notification these activities will be added to the firm’s Part 4A permission from 3 January 2018.
View Implementation of MiFID II: Part 2 – PS9/17, 28 April 2017