The firm-facing requirements of the MiFID regulations are to be transferred into FCA Handbook rules next year.

The FCA has proposed to retain the current substance of the MiFID requirements in its new Handbook rules.

It will also consult about future reform to the rules to make then better suited to UK firms and clients. The regulator said this includes in circumstances where the Consumer Duty does not apply and it will consider how it could rationalise or improve MiFID II derived conduct and organisational rules, including for Article 3 firms.

The FCA also plans to discuss whether and how the client categorisation rules could work more effectively.  

The consultation comes soon after Chancellor Rachel Reeves’ Mansion House speech, which included plans to reform the MiFID framework to re-energise capital markets.

The MiFID regime was an EU directive adopted by the UK as part of a swathe of investment regulations.

MiFID rules apply to MiFID investment firms including credit institutions and collective portfolio management investment firms, ‘Article 3’ firms, UCITS managers, Residual Collective Investment Scheme operators, and small authorised UK Alternative Investment Fund Managers,      Occupational Pension Scheme operators, and recognised investment exchanges.

The current MiFID rules will be repealed by the Treasury next year. It committed to repealing MiFID cost and charges provisions post Brexit.

The FCA, PRA and the Treasury have already watered down a number of the MiFID rules due to the belief that they are increasing costs and red tape for firms with little benefit for consumers.

The consultation paper will be open for comment until 28 February 2025.