FCA CP24/24: MiFID Org Reg reform

To further the UK's programme to repeal EU Law, on 27 November 2024, the Financial Conduct Authority (the FCA) published CP24/24 The Organisational Regulation (the CP). The CP contains proposals to transfer the firm-facing requirements of the UK MiFID Organisational Regulation  (the MiFID Org Reg) into FCA Handbook rules.

What is the MiFID Org Reg?

The MiFID Org Reg (Delegated Regulation (EU) 2017/565) is a piece of European Level 2 legislation which is part of the MiFID2 (Directive 2014/65/EU) package. The MiFID Org Reg contains firm-facing conduct rules and systems and controls rules to ensure market integrity and investor protection. The MiFID Org Reg was assimilated into UK law post-Brexit by virtue of the European Union (Withdrawal) Act 2018 which enacted a UK version of the MiFID Org Reg.

Why is this CP necessary?

Post-Brexit, there is a UK version of the MiFID Org Reg that applies directly to UK MiFID investment firms. In 2018, when implementing MiFID2, the FCA replicated parts of the MiFID Org Reg into the FCA Handbook for certain sourcebooks so that firms could see all the relevant MiFID requirements relating to a particular topic in one place. There is, therefore, some duplication across the FCA Handbook and the UK version of the MiFID Org Reg.

The FCA is proposing to replace the UK version of the MiFID Org Reg with requirements in its regulatory rules, i.e. the Handbook. The UK version of the MiFID Org Reg will be repealed and all rules will be within the FCA Handbook. The FCA is not looking to make any substantive changes to the rules but just change where they are located.

The CP questions allow for firms to point out any concerns with the approach, the changes themselves and/or any inconsistencies or unintentional change in scope.

Who is this CP relevant to?

This CP will be of interest to:

• UK MiFID firms;
• Article 3 MiFID Optional Exemption firms;
• Third country firms;
• UCITS ManCOs;
• CIS operators;
• AIFMs;
• Occupational Pension Scheme firms; and
• Recognised Investment Exchanges.

Our client note examines the top ten things you should know about the FCA's proposals and what the next steps are.