FCA Chief Executive Comments on FCA Mission and Brexit

The FCA has published a speech by Andrew Bailey, FCA Chief Executive, at the FCA's 2016 annual public meeting on 19 July 2016.

Mr Bailey stated that the FCA is currently working on developing a mission, the purpose of which will be to address the difficult questions that underpin financial conduct regulation, including establishing a clear understanding of the FCA's obligations to consumers and to firms. Mr Bailey stated that balancing the duty of care towards consumers, the duty of responsibility of consumers for their decisions, the role of firms and the role of the regulator would lie at the heart of the FCA's mission. It will also address the issue of whether the FCA should prioritise some consumers over others and how the FCA should decide among its tools when it decides it needs to take action.

The FCA intends to publish a proposal for the mission for "intensive public consultation" in early autumn 2016.

Mr Bailey also welcomed the statement made by Philip Hammond, Chancellor of the Exchequer, that the UK would seek access to the single market in negotiations with the EU concerning Brexit. Mr Bailey stated that the FCA would support the government's work to put in place new arrangements with the EU and to establish trade agreements with other countries.

Read Mr Bailey's speech in full.

FCA Consults on PRIIPs Rules

The FCA published a consultation paper (CP16/18) on 18 July 2016 on changes to its disclosure rules to reflect the direct application of the Regulation on key information documents (KIDs) for packaged retail and insurance-based investment products (PRIIPs) (Regulation 1286/2014) (PRIIPs Regulation).

The PRIIPs Regulation, which is currently scheduled to take effect on 31 December 2016, will require firms to prepare, publish and provide a KID for each PRIIP manufactured. As the provisions of the PRIIPs Regulation are directly applicable, the FCA will not transpose them into the FCA Handbook but will instead refer to them.

In the consultation the FCA:

• Sets out its views on those products that it considers currently fall within the definition of a PRIIP and those that do not.
• Considers the disclosure requirements in the FCA Handbook that apply to firms that manufacture, give advice on or sell products that will be PRIIPs. These rules are primarily set out in the Conduct of Business sourcebook (COBS) and the Collective Investment Schemes sourcebook (COLL). The FCA plans to amend or delete rules that would duplicate or conflict with the PRIIPs Regulation and to amend or maintain certain rules on how firms may provide additional information to supplement the KID.
• Sets out its views on the interaction between the PRIIPs Regulation and the disclosure requirements in MiFID II.

The FCA's proposed draft Handbook text is set out in Appendix 1 to the consultation.

The deadline for responses to CP16/18 is 19 September 2016. The FCA intends to publish a policy statement making final rules in November 2016, with the rule changes coming into force on 31 December 2016.

Read the consultation here.

FCA Publishes Second MiFID II Consultation Paper

The FCA published its second consultation paper on the MiFID II Directive on 29 July 2016. This CP follows on from CP15/43, published in December 2015, which set out the background to the introduction of MiFID II and its key objectives and mainly covered issues relating to new rules governing the secondary trading of financial instruments.

This new CP covers a range of issues including position limits and reporting for commodity derivatives, systems and controls requirements for firms providing MiFID investment services, along with fees and client asset protections.

The consultation closes on 28 October 2016.

Read the consultation paper in full.