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Changes to UK MiFID’s Conduct and Organisational Requirements

2021-12-01 01:12:14

PS21/20: FCA set their final policy position and rules on changes to the research rules and the removal of the best execution reporting in RTS 27 and RTS 28 following feedback to CP21/9.

The changes are intended to ensure that the rules for research and best execution are better tailored and more proportionate to the risks arising. This should remove unnecessary regulation, make the requirements less complicated and make these markets work better.

FCA stated that the rule changes aim to improve the availability of research on SME firms by providing an exemption to the inducements rules that prohibit the bundling of research and execution fees. Separately, the changes that FCA is making to best execution reporting are intended to relieve trading venues and brokers from preparing and publishing best execution reports that don’t appear to benefit users.

These changes will also sit within wider reform work, they are undertaking with the Treasury on capital markets.

The final rules apply to:

  • Investment firms and market operators in the UK
  • Banks and operators of Collective Investment Scheme who provide investment services persons providing investment advice and reception and transmission of orders who did not opt into MiFID
  • Unauthorised persons providing research

They will also be relevant to individuals who use the services of firms providing investment services, including pension funds and corporates. The rules will also be relevant to small companies whose shares are traded on public markets.

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