By Sobia Hamid.
Firms who need to change their regulatory permissions as a result of MiFID II, in effect from 3 January 2018, are advised by UK regulator the Financial Conduct Authority (FCA) to submit a completed application for authorisation or a variation of permission by 3 July 2017, in order to ensure that the application can be determined by the FCA before MiFID II takes effect.
Any business undertaking regulated activities without the required permissions under the Financial Services and Markets Act 2000 (FSMA) may face civil, regulatory and/or criminal consequences. For instance, if an individual or firm carries out regulated activities in the UK by way of business without being authorised or exempt, it does so in breach of section 19 of the FSMA. Breach of section 19 of FSMA is a criminal offence, and the FCA has the power under Part XXV FSMA to apply to Court for injunctions and restitution orders against people who contravene sections 19 and 21 of FSMA.
An authorised firm that undertakes regulated activities without the appropriate permissions to do so will contravene section 20 of FSMA. In such circumstances there are a number of regulatory tools that may be available to the FCA, including:
- disciplinary sanctions: including public censure, financial penalties or the suspension or restriction of their permissions under Part 14 of FSMA
- OIREQ (Own Initiative Requirement) and OIVOP (Own Initiative Variation of Permission) powers under Part 4A
- powers of injunction and restitution under Part XXV of FSMA
The FCA has published an application and notification user guide for firms affected by MiFID II.
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