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Key Regulatory Developments in 2018

By Claire Lewis

Updated on Thursday, 11 January, 2018

Will PRIIPs and MiFID II be the Grinches that steal this year’s Christmas?

As the industry counts down to PRIIPs and MiFID II in days, rather than weeks or months, FE recaps some of the last minute items on firms’ ‘to do lists’ this side of Christmas, and lays out all the important regulatory dates for your diaries in 2018.

Mikkel Bates, consultant at FE’s regulatory data service comments: “If you are a provider of PRIIPs, you need to have your key information documents (KIDs) produced and posted on your website and elsewhere, so buyers and distributors can find them before they complete an investment after the end of this year.

“MiFID II presents a very different picture, as it affects many more activities in more companies, including UCITS managers that are technically out of scope.  In respect of client reporting, the challenges include distributors (platforms, advisers and DFMs, mostly) getting all the data from fund groups on all the funds their clients can buy and fund groups making sure their fund data is available to all distributors that need it.  To complicate matters, when it comes to the annual post-sale (“ex post”) reporting, data will be needed on all funds a distributor’s clients hold, even if they are not on their buy list.”

FE closed its European MiFID Template (EMT) solution to new clients several weeks ago, but are still offering a “self-service” option for distributors to receive the complete file with data from all fund groups supplying FE.  From this, firms can extract the ones they need to produce their client reports and assess the funds’ target markets.

Bates continued: “The FCA has said it expects to see MiFID II project staff still available in the early part of 2018 to deal with any late changes, clarifications or issues that arise in the live environment, so don’t think it’s all over by Christmas.  As is so often the case, Winston Churchill had an apt quote for this: ‘Now this is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.’”

Key regulatory developments for your calendars in 2018:

  • PRIIPs KIDs and MiFID II requirements come in from the beginning of the year.  KIDs and ex ante MiFID II reporting is black-and-white – no report = no sale.  But other aspects of MiFID II are not as clear-cut.  Regulators are aware of the work being put in to meet the deadline and are unlikely to come down hard on those who may not have all their ducks in a row on 3 January, as long as they are convinced they have been making the right moves towards achieving compliance.

  • The Insurance Distribution Directive (IDD) follows on 23 February 2018.  This puts a variety of obligations on distributors of non-life, life and insurance based investment products (IBIPs).  In many ways, it imposes MiFID-type obligations on products that fall outside the scope of MiFID II.


  • General Data Protection Regulation (GDPR) takes effect on 25 May 2018.  This expands the requirements of the existing Data Protection Directive, which has been around for 20 years (increased geographical scope, increased rights of individuals, increased obligations on companies holding data and increased penalties for failure).  Penalties include fines of up to 4% of global turnover or EUR 20million, whichever is greater.


  • At the end of 2018, there will a review of the PRIIPs Regulation.  This will look at, amongst other things, the products in scope, whether the KID is achieving what it was designed to achieve and whether UCITS’ exemption should end in December 2019, as planned.


  • Benchmark Regulation comes in on 1 January 2018.  This requires providers and users of benchmarks to be registered and is designed to avoid manipulation of benchmarks.


  • FCA Investment Platform Market Study.  The interim report is due to be published in the summer of 2018, looking at matters such as the business models of platforms, the impact platforms have on the overall costs of investments, whether competition is distorted by vertically integrated firms and any barriers to entry.


  • FCA Asset Management Market Report promised further investigation into several findings in the report that are not covered by MiFID II, such as switching off legacy trail commission.


  • Senior Managers & Certification Regime.  The FCA published two CPs in July 2017 on extending this from the banks to all FCA firms and all insurers, with Policy Statements on both due in Summer 2018.

FE Precision+ Regulatory & Registration Services is designed to alleviate some of the data challenges that asset managers, platforms and advisers may face in meeting some of their regulatory obligations, namely PRIIPs and MiFID II. Contact the FE press office if you would like to speak to Mikkel Bates about the data requirements around these two pieces of regulation.