On October 26, MFA and AIMA filed a letter to the UK FCA in response to its second consultation paper on the implementation of MiFID II. Our letter focused primarily on the implementation of position limits and position reporting, and made the following points, among others:
- We supported HM Treasury’s view with respect to the territorial scope of the position limits regime (“where two persons in a third country with no link to the UK trade economically equivalent OTC contracts the limits do not apply”), and urged the FCA to clarify that only “economically equivalent” contracts that have a link to the UK will be subject to position limits.
- We urged the FCA to clarify that in a fund management context the aggregation requirement applies at the fund/account level, rather than at the investment manager level.
- We urged the FCA to adopt a notice period of at least six months and to grandfather existing positions.
- We supported the FCA’s decision to require that position reports be submitted by GMT 17:00 on the following business day; and urged the FCA to introduce an explicit mechanism for delegated reporting of position data.
- We urged the FCA to require trading venues to have specific confidentiality safeguards relating to position reporting.