Mifid II  

FCA reveals new adviser levy for MiFID II

FCA reveals new adviser levy for MiFID II

Financial advice firms will be hit with a new regulatory levy next year, the Financial Conduct Authority has revealed.

In a consultation paper published yesterday (16 November), the FCA said the new charge will pay for the costs of implementing the EU's Markets in Financial Instruments Directive, or MiFID II, due to come into force in January 2018.

The regulator laid out the "fee blocks" - that is, the groups of types of financial services companies - that fell under MiFID II regulations.

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The list included financial advice firms, but excluded those with an income below £100,000.

It also excluded advisers dealing solely in insurance or pension transfers.

The FCA said it did not have "comprehensive information about the proportion of firms in each fee-block that will directly benefit from" from Mifid II.

As a result, it stated: "As an interim measure, we intend next year to allocate the costs between the relevant fee-blocks in proportion to their share of the FCA’s AFR."

Fee blocks liable for the charge included "advisors, arrangers, dealers or brokers"(A13), "corporate finance advisers" (A14), "portfolio managers" (A7), "managers and depositaries of investment funds, and operators of collective investment schemes or pension schemes" (A9), and "firms dealing as principal" (A10).

The FCA announced how it intended to enforce Mifid II rules in September. The rules are due to come into effect well before the UK leaves the EU.

A headline regulation was the requirement for advice firms to tape telephone calls.

Following the June referendum vote, the UK's departure from the EU can only come two years after triggering Article 50, which Prime Minister Theresa May has said will happen in April 2017. That would put the UK's earliest departure date at April 2019, 15 months into the Mifid II regime.

However, a recent High Court ruling found that the decision to trigger Article 50 must go through Parliament, putting the PM's timetable in doubt.

james.fernyhough@ft.com