FSA warns firms to prepare for EU Directive
The regulator said the Directive will have a significant impact on financial services regulation and how firms operate and interact with customers. It said it would result in major changes to parts of its Handbook with significant implications for both prudential and conduct of business requirements.
The FSA has published ‘Planning for MiFID’, a short guide highlighting the key areas such as conduct of business and systems and controls requirements which will be affected by the Directive and the likely main practical implications for regulated firms. It has also published the ‘International Regulatory Outlook’ (IRO) which analyses regulatory change being driven by European and other international initiatives and their likely effects on UK financial services.
Hector Sants, FSA managing director for wholesale business, said: “This planning document, along with the IRO, is key to helping firms understand how their businesses will be affected by regulatory developments over the next few years and what they need to do to plan for the future.”
As significant aspects of the MiFID package have yet to be agreed at European level the FSA cannot be certain at this stage about the final detail of the legislative requirements. HM Treasury and the FSA will consult on the UK implementation of the Directive when the final details are published during 2006.
On the EU’s Green Paper on mortgage credit, the FSA said there should be more detailed analysis of the costs and benefits involved in introducing greater mortgage integration within the EU.