Introduction
MiFID or Markets in Financial Instrument Directive is the EU's legislation that regulates firms who provide services to clients involved with 'financial instruments, such as shares, bonds, units in collective investment schemes and derivatives, and the venues such instruments are traded. MiFID II came into force on 3 January 2018.
UK FCA Investment license - Investment Services
(1) Reception and transmission of orders in relation to one or more financial instruments;
(2) Execution of orders on behalf of clients;
(3) Dealing on own account;
(4) Portfolio management;
(5) Investment advice;
(6) Underwriting of financial instruments and/or placing of financial instruments on a firm commitment basis;
(7) Placing of financial instruments without a firm commitment basis;
(8) Operation of an MTF;
(9) Operation of an OTF
UK FCA Investment license - Ancillary Services
1) Safekeeping and administration of financial instruments for the account of clients, including custodianship and related services such as cash/collateral management and excluding maintaining securities accounts at the top tier level;
(2) Granting credits or loans to an investor to allow him to carry out a transaction in one or more financial instruments, where the firm granting the credit or loan is involved in the transaction;
(3) Advice to undertakings on capital structure, industrial strategy and related matters and advice and services relating to mergers and the purchase of undertakings;
(4) Foreign exchange services where these are connected to the provision of investment services;
(5) Investment research and financial analysis or other forms of general recommendation relating to transactions in financial instruments;
(6) Services related to underwriting.
(7) Investment services and activities
UK FCA Investment license - License requirements and standards
Threshold Conditions - firms are required to demonstrate at the time of their authorisation that they satisfy the minimum standards set by FSMA, namely the Threshold Conditions, for all regulated activities. Firms must also demonstrate that their key persons running or managing the firm are 'fit and proper' to perform their functions.
Location of offices - a firm's 'mind and management' I.e. directors, compliance and governance function, audit and risk functions must be in the UK.
Appropriate resources - firms must demonstrate that they have appropriate financial resources, skills and experience of those managing its affairs.
Suitability - firms must demonstrate competence and ability of their management, and that its affairs are conducted in an appropriate manner in the best interest of consumers.
Next Steps
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