Less than one month after the launch of MiFID II, investment manager Gina Miller has announced her plans to sue the Financial Conduct Authority (FCA) for creating an “anti-competitive market.” GlobalData Financial Services asks should financial services providers be concerned?

MiFID II legislation came into force on January 3, 2018. And while the FCA has encouraged firms to comply ahead of this date, the regulator has stated that it will not fine firms that are not yet fully compliant as long as they are taking measures to move towards this status.

According to Miller, not enforcing a hard deadline has led to inaction on the part of companies across the UK. In other words, non-compliant financial services providers can avoid fines so long as they can prove that they are working towards becoming MiFID-obliging.

Despite the lack of a hard deadline, the FCA has published regular updates and consultation papers leading up to the launch of MiFID II. As published in a previous opinion piece, these publications allow firms to respond to developments in financial regulation and better understand the concerns of the wider industry.

Regardless of whether Miller is successful in suing the FCA, it is expected that firms will pay greater attention to MiFID-related developments and publications released by the FCA.

Aside from wanting to avoid hefty fines charged by the FCA for failure to show progress, demonstrating MiFID II compliance is an attractive feature from a client perspective.

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GlobalData’s 2017 Wealth Managers Survey reveals that the launch of MiFID II will have a notable, positive impact on the financial services industry for consumers.

A total of 80.7% of respondents agree that MiFID II will encourage price competition in the wealth management industry. Furthermore, 51.8% agree that MiFID II will have a positive effect on the relationship between wealth managers and HNW investors. This is unsurprising, given that MiFID not only aims to improve business practices for consumers, but also ensure they receive fair and transparent advice.

Looking ahead, it is unlikely that a hard date for MiFID II compliance will be announced.

But for financial services providers, instilling a proactive approach and keeping a close eye on any updates can minimize the chances of incurring a fine.

And from a purely operational perspective, businesses that have not historically required regulatory supervision, but must now receive authorization under MiFID II could risk being unable to conduct business in the UK if they fall behind in their progress.

In the future, more financial services providers will flock to FCA resources to ensure they do not miss the mark.