On 8 November 2019, the FCA published a statement on the US Securities and Exchange Commission’s announcement to extend the SEC staff “no action letter” relating to the MiFID II Directive inducements and research provisions.

The letter addresses the potential conflict between US regulation and MiFID II. The existing relief was due to expire on 3 July 2020 but has now been extended until 3 July 2023.

The FCA welcomes this decision and explains that during the remainder of the current period and the extended period of the no-action relief, broker-dealers subject to the US regime may receive payments for unbundled research from firms subject to MiFID II or equivalent rules of EU member states without being considered an investment adviser under US law. This will also apply to UK firms in the event of EU withdrawal before or during the extended period.

In addition, the FCA states that it will carry out work in 12-24 months’ time to assess firms’ ongoing compliance with the FCA rules and developments in the market for research.