M2G 2.1 Background

1This guide sets out an overview of the FCA’s approach to the onshoring2 of the Markets in Financial Instruments Directive II (MiFID II) in the SYSC sourcebook. 2The guide focuses on the regulatory regime for UK firms and is aimed at UK MiFID investment firms, that is investment firms that would require authorisation2 under MiFID and credit institutions carrying on MiFID business, and MiFID Optional exemption firms. The latter comprise advisers or arrangers who do not hold client money or assets and meet other conditions imposed under article 3 MiFID II, so as to be exempt from the Directive’s full application. See PERG 13 Q492.

1MiFID II contains revised senior management and systems and controls obligations relating to firms. With the exception of one aspect 2of the whistleblowing obligations in MiFID II contained in2 primary legislation, onshoring of the MiFID II Level 1 requirements2 takes the form of regulatory rules. The relevant FCA rules are mainly contained in SYSC but PRA-authorised firms will also be subject to rules in the General Organisational Requirements in the PRA Rulebook.

1The Commission Delegated Regulation 2017/565 of 25 April 2016 ), as onshored by the Exit Regulations,2 contains detailed organisational requirements for those firms to which it applies, including authorised MiFID investment firms and credit institutions. 2