(AT1 notification deadline)

Late 2022

(Internal capital adequacy and risk assessment (“ICARA”) review)

Review ICARA process in preparation for submitting first MIF007 report in early 2023.

Be prepared for interactions with the FCA on Remuneration Policy elements, particularly Policy Statements and the identification of material risk takers (“MRTs”).

Consider impact of amendments to existing fields.

Review policies and procedures to accommodate the:

• swift resolution of reconciliation breaks;
• proposed unique trade identifier (“UTI”) generation waterfall;
• collection of legal entity identifiers (“LEIs”) from non-financial clients under the clearing threshold (“NFCs- ”); and
• obtaining of broker ID, clearing member IDs and purpose of trade information from NFC-s.

Publication of final rules during H1 20211

Revise AR supervision procedures / monitoring programme to:

•  verify AR’s details at least annually;
• ensure updates to AR’s activities are promptly reported to the FCA;
• collect and provide AR related complaints and revenue data to the FCA;
• facilitate increased oversight of ARs (including introducer ARs) per the requirements outlined in the FCA’s proposals; and
• facilitate an annual self-assessment of the adequacy of the firm’s arrangements to oversee their ARs.

Set impact tolerances for maximum tolerable disruption.

Identify vulnerabilities in operational resilience.

Publication of final rules by 31st July 2022

• if the firm’s target markets are clear;
•    if the firm’s current product development processes are delivering positive outcomes for consumers; and
• how relevant employees and third party promoters could be effectively trained on the CD’s requirements.

Final rules to be published in summer 2022

Conduct a review of current promotional activity. Make an assessment as to the likely impact of the new rules.

Train employees and third parties involved in promoting cryptoassets on the firm’s behalf.

Review your counterparties. Determine if they are also in-scope of the requirements.

Work out how much collateral you will probably need to post.

Review your collateral management processes, particularly in view of the calculation methodology to be used and permitted collateral types.

Ensure custody arrangements with service providers are in place and have been tested.

Check all requisite legal documentation is in place. If an entity is significantly impacted by Phase 6 then it would be prudent to have your documentation arrangements reviewed by outside counsel.

Possible new guidance on the issuance of investment recommendations via social media channels.

• ‘payment for order flow’ (“PFOF”) and ‘zero-commission’ practices;
• the use of social media in promoting investments to retail investors, including the use of third-party influencers in campaigns;
• the effectiveness of risk warnings in the provision of ‘non-advised services’;
• conflicts of interest often associated with certain retail trading business models, e.g. ‘b-booking’;
• the use of ‘gamification’ techniques; and
• the cross-border provision of online trading services.

Prepare to enable continuity of service post expiry of temporary regulations. Communicate plan to affected clients as soon as practicably possible.

• the third country regime
• product governance
• costs and charges

• target markets have been clearly defined with a clear audit trail evidencing challenge;
• there is a clear rationale for cost and charging structures, particularly markup; and
• bespoke products have been stress tested, for example to consider periods of high volatility.