MiFID II Customer Communication: What happens post Brexit?

Mikkel Bates, FE regulatory correspondent discusses whether there could be any changes to the MiFID II regulation from a client communication perspective, post Brexit.

The recent European Commission Notice to Stakeholders on MiFID opened with talk about “the considerable uncertainties in…the content of a possible withdrawal agreement” and said the requirements on UK firms are “subject to any transitional arrangement that may be contained in a possible withdrawal agreement.

So, does this suggest there could be any changes to the client communication aspect of the regulation in the UK?  At this early stage of the negotiations it’s impossible to know for sure.  However, whilst we are not expecting any U-turns from the FCA given that they were a keen proponent of MiFID II from the start (especially the slippage cost methodology for transaction costs), some things could or may need to be adapted to make them more suitable to the way the UK market operates. 

A possible case in point is the reporting - by DFMs - of a 10% fall in a portfolio’s value by the end of the same day.  Given the relationship between advisers, platforms and DFMs, even a 24-hour extension would make this work better.

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