Prudential Regulation Authority Publishes Second Policy Statement on Implementing MiFID II

The Prudential Regulation Authority has published a second Policy Statement and final rules implementing certain aspects of the Markets in Financial Instruments legislative package. Policy Statement 2 relates to aspects of the Markets in Financial Instruments Directive and the Markets in Financial Instruments Regulation as well as the Commission Delegated Regulation on the organizational requirements and operating conditions for investment firms (published in the Official Journal of the European Union on March 31, 2017). The Policy Statement relates to requirements for a firm's management body and organizational requirements, the new regulated activity of operating an Organised Trading Facility, the newly regulated financial instrument of "emission allowances" and structured products. The PRA consulted on the changes that the Policy Statement and amended rules implement between November 26, 2016 and February 27, 2017. There were no responses to the proposals and the PRA has not amended its proposed policy or made any substantive changes to the proposed rule changes.

The Policy Statement also sets out the implementing arrangements for granting authorizations for operation of an OTF and in relation to emission allowances and for the regulated activities of dealing, advising, managing and arranging structured deposits. Firms should submit complete applications for variation of permission by July 3, 2017. Arrangements are also set out on the PRA notifications for a firm that wants to carry out following activities in relation to structured deposits. Certain Supervisory Statements have also been updated to refer to MiFID II instead of MiFID. However, the PRA has not made any changes to its supervisory approach set out in those Supervisory Statements.

The PRA consulted on its approach to passporting and algorithmic trading earlier in 2016 and has published its final rules for those areas. The PRA will consult on other aspects related to MiFID II in due course.

MiFID II will apply from January 3, 2018. Member states are required to transpose the requirements into national laws by July 3, 2017. The PRA's amended rules and policy will take effect from January 3, 2018.

View the Policy Statement.

View the consultation paper.