U.K. Further Implements MIFID II

In March, the U.K. issued the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) Order 2017 (2017/488) (the “Order 1”) and the Financial Services and Markets Act 2000 (Regulated Activities) (Amendment) (No. 2) Order 2017 (2017/500) (the “Order 2”), implementing part of MIFID II. which is the European Union’s update of regulation of the financial services market.  The first Order, among other things, (i) causes new MIFID II regulated activities to be regulated in the U.K., such as operation of an “organised trading facility” and trading or advising on structured deposits and trading emissions and (ii) causing binary options to be regulated as financial instruments rather than as gambling contracts.  Order 2 is a more limited order that is designed to allow regulated firms to give advice, other than personal recommendations, and not be considered to be giving regulated investment advice.   Order 1 was effective on January 3, 2018, except a part that was effective on April 1, 2017.  Order 2 was effective immediately.  The effective date of the entire MIFID II has been extended by the European Union to January 3, 2018.  With the 2-year exit of the U.K. from the EU – Brexit – triggered, however, it remains to be seen what will happen to U.K. financial services law.