The FCA is pressing ahead with implementing new EU rules despite the Brexit vote, it announced this morning.

Bosses told firms they must be prepared for complying with the new The Markets in Financial Instruments Directive (MiFID) II.

It is due to apply from 3 January 2018.

More details about the reforms and how they would be implemented in the UK were outlined today in a second FCA consultation paper.

The changes will be relevant to managers and advisers in the investment sector, officials stated.

Details regarding remuneration provisions are relevant to financial advisers exempt from MiFID under Article 3, the report said.

New FCA Chief Executive Andrew Bailey said: “As we said in our statement following the EU referendum, firms must continue to abide by their obligations under UK law, including those derived from EU law and continue with implementation plans for legislation that is still to come into effect.”

However, the report stated: “We will keep the proposals under review to assess whether any amendments will be required due to changes in the UK regulatory framework, including as a result of any negotiations following the UK’s vote to leave the EU.”

Regarding remuneration provisions relevant to financial advisers who are exempt from MiFID, officials detailed responses from its initial consultation on the matter.

Previously, the FCA asked whether it should explore applying MiFID II’s remuneration standards for 
sales staff and advisers across to non-MiFID II businesses, for example by introducing a cross- cutting set of standards on sales staff remuneration.

The report stated: “We received 40 responses to this question. Of these responses, a number of cautioned against extending the MiFID II to non-MiFID firms given the multiple European initiatives in this space that are currently being developed.

“The remaining responses generally agreed with the proposal to apply the MiFID remuneration requirements to non-MiFID firms as this would create a consistent regime across different products and markets, although a few of these responses again noted that it may be preferable to wait until there was greater certainty at EU level.”

The FCA said it recognised the advantages of introducing a cross-cutting set of standards on sales staff remuneration but at this stage proposed to only apply MiFID II’s remuneration standards for sales staff and advisers to:

• common platform firms (including for example MiFID investment firms and dormant account fund operators, but excluding collective portfolio management investment firms)

• Article 3 firms

• branches of third-country firms (only applies in relation to activities carried on from an establishment in the UK)

The original MiFID, introduced in 2007, set the regulatory framework for the buying, selling and organised trading of shares, bonds, units in collective investment schemes and derivatives across the European Union.

MiFID II is revising the original directive to introduce substantial and wide ranging measures designed to improve investor protection and promote market integrity, and to meet G20 commitments on reforming and strengthening derivatives markets.

Mr Bailey said: “MiFID II contains important measures to enhance investor protection and bolster financial stability. It reflects recent themes of UK conduct regulation, such as improved controls on the manufacturing and distribution of financial products, and it implements the international commitments the UK entered into to reform derivatives markets following the financial crisis."