Conference Dailys TRADETech Daily 2018 | Page 9

THETRADETECH DA I LY
latest news
THE OFFICIAL NEWSPAPER OF TRADETECH 2018
Regulation
FCA targets MiFID II compliance in business plan
T
he Financial Conduct Authority (FCA) has laid out plans for increased
monitoring and assessment of compliance with MiFID II rules around
conflicts of interest, according to its 2018/2019 business plan.
The UK financial watchdog outlined its focus on ensuring firms are com-
plying with specific changes under the new regulation including research
unbundling, best execution and restricting the practice of payment for
order flow.
“Our supervision work will focus on ensuring that firms are complying with
these changes and we will assess if the rules are working as intended,” the
report said. “Over 2018/19 we will monitor firm compliance with new require-
ments to address conflicts of interest in producing connected research.”
The FCA added the introduction of MiFID II’s requirements around
conflicts of interest and a lack of clarity by market participants about the
capacity they are acting in causes harm to markets.
Also among the regulator’s MiFID II objectives is increasing its supervi-
sory efforts on monitoring compliance of systems and controls for both
traders and venues related to high frequency trading (HFT).
“We will use existing diagnostic work on HFTs, circuit breakers and
mini-flash crashes to inform this work,” the FCA said. “This will enable
us to anticipate and deal with potential harms this kind of technological
advancement may create.”
For the investment management sector, the watchdog plans to take a
closer look at the rise of passive investing and its wider impact of markets
with a new study exploring the key aspect of market performance.
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