The FCA has published a speech given by David Lawton, FCA Director of Markets Policy and International. The speech is entitled Wholesale market policy – a year in review.

In his speech Mr Lawton reviews some of the more important market policy developments in 2015 and looks at how they might contribute to the goal of fair and effective markets. In particular Mr Lawton covers:

• MiFID II. Mr Lawton notes that Member States are still awaiting the final delegated acts from the European Commission (the Commission). On the topic of dealing commission Mr Lawton states that the FCA gave a view on ESMA’s final advice which expressed strong support for the proposals made. However, despite publishing a discussion paper late last year and a subsequent feedback statement in February this year on what its future dealing commission rules may look like, the FCA will only publish a consultation paper once the delegated acts have been approved by the Commission and passed the scrutiny of both the European Council and the European Parliament. Mr Lawton also notes that in the past couple of weeks, the big discussion on MiFID II has been around timing. He mentions that following input from ESMA, the Commission has said that it is contemplating a one-year delay in MiFID II’s implementation date, and the European Parliament’s negotiating team has signalled that it would support that;
• Market Abuse Regulation (MAR). Mr Lawton explains that MAR is really important for fair and effective markets, in that it will enable regulators to better tackle abusive market practices. He reminds his audience that ESMA published final technical standards in September and states that the delegated acts, based on ESMA’s advice, are expected to be published “very soon”;
• Capital Markets Union (CMU). Mr Lawton notes that the Commission’s action plan is “rightly ambitious” and that two specific legislative proposals have been published: one to update the existing rules in the Prospectus Directive, and a new proposal to facilitate simple, transparent and standardised securitisation. Further information on these proposals can be found on our CMU technical resource;
• UK Fair and Effective Markets Review (FEMR). Mr Lawton mentions a few of the key recommendations made in the June final report including those relating to the new criminal offences for market abuse – essentially, to mirror those in MAR, so as to provide an extra deterrence via criminal penalties. Mr Lawton also mentions the recommendation concerning the creation of a criminal market abuse regime for spot foreign exchange markets, applicable to all market participants. He explains that in 2015 thinking has been at its earliest stages, considering questions of scope and coverage, but much more is likely to be done in 2016; and
• Competition studies. Mr Lawton explains that what is noteworthy about FCA competition market studies is that they are typically started not when there is a crystallised risk that needs fixing, but rather when there might be features of important markets that might not be working in the most fair and effective way. In relation to the competition market study into the investment banking and corporate banking sector the FCA should be producing some initial findings in early 2016 with a full report and recommendations in the summer.

View Wholesale market policy – a year in review, 11 December 2015