MiFID overhauls, and extends, the Investment Services Directive (ISD). It has major implications for virtually all firms subject to the ISD as well as some investment firms that were outside the ISD's scope. It affects many areas of the FSA's rules, including systems and controls, client money, conduct of business requirements and financial promotions as well as rules relating to the operation of the markets – such as pre and post-trade transparency requirements.
The new rules required to implement MiFID came into effect on 1 November 2007. There are changes to a number of the FSA Sourcebooks, but the most significant is the replacement of the old Conduct of Business Sourcebook (COB) with a new, more principles-based sourcebook known as COBS. This affects all firms conducting investment business, including those which fall outside the scope of MiFID as such. In some areas there are different rules for MiFID and non-MiFID business.
Preparing for the changes has been a massive task both for the FSA and for firms. With the best will in the world not all firms will have completed all their implementation work by 1 November 2007. But now the implementation deadline has passed, it is important that firms attend to any outstanding matters as soon as possible. FSA have provided a lot of help. But firms may still find external help useful to interpret the requirements for their own particular circumstances. We have been helping, and continue to help, clients in a number of ways:
- by keeping them informed about developments specifically relevant to their business;
- by assessing the impact for their business, and devising an implementation plan tailored to their business needs;
- by assisting with the execution of implementation plans, for example by drafting or reviewing procedures and other documentation, developing appropriate training, assisting with any necessary interactions with the FSA.
See also our briefing notes.