EXPLANATORY NOTE
(This note is not part of the Regulations)
These Regulations are made in exercise of the powers in sections 141A(2), 286(1) and 428(3) of the Financial Services and Markets Act 2000 (c. 8) and the powers in Article 50 of, and paragraphs 1(7), 1(9) and 1(10) of Part 1 of Schedule 3 to, Regulation (EU) No 600/2014 of the European Parliament and of the Council of 15 May 2014 on Markets in Financial Instruments.
They amend the Financial Services and Markets Act 2000 (Recognition Requirements for Investment Exchanges, Clearing Houses and Central Securities Depositories) Regulations 2001 and Commission Delegated Regulation 2017/565/EU supplementing Directive 2014/65/EU of the European Parliament and of the Council as regards organisational requirements and operating conditions for investment firms and defined terms.
These Regulations—
1
remove an obligation on trading and execution venues to publish reports relating to the quality of execution of orders obtained on them;
2
remove a requirement for investment firms providing portfolio management services to inform their professional client whenever the overall value of the portfolio depreciates by 10% and thereafter at multiples of 10%;
3
remove an obligation for firms to provide detailed contract notes for trades executed on behalf of wholesale clients, and quarterly reports on portfolio management services;
4
exempt investment firms providing portfolio management services to professional clients from the requirement to provide cost benefit analyses to those professional clients when they switch the instruments in which they invest;
5
revoke the obligation for an investment firm to provide specified information relating to its services to clients before a service is carried out, where the services are provided to eligible counterparties;
6
allow investment firms, where agreements to buy or sell financial securities are concluded via distance communication and where the client consents, to provide costs and charges information to their clients after the transaction has been carried out;
7
make electronic communication the default mode of communication with wholesale clients.
These Regulations refer to and amend references to the sourcebook made by the Financial Conduct Authority under the Financial Services and Markets Act 2000. The sourcebook made by the Financial Conduct Authority is available on https://www.handbook.fca.org.uk/handbook and copies of the rules referred to can be obtained from the Financial Conduct Authority, 12 Endeavour Square, London E20 1JN, where they are also available for inspection.
A full impact assessment has not been produced for this instrument as no significant impact on the private, voluntary or public sector is foreseen. A de minimis impact assessment is available from HM Treasury, 1 Horse Guards Road, London, SW1A 2HQ and is published with the Explanatory Memorandum alongside this instrument on www.legislation.gov.uk.