A Brief Future of Financial Regulation

In the current state of international financial insecurity and volatility, new regulations are being implemented regularly alongside the revision of the old legislation. In order to comply with new financial rules, businesses have to know and understand these regulations to ensure they do not operate outside of the legal parameters – something that could see them landed with a substantial fine or even with a more serious penalty.

With the FSA now dissolved and financial regulatory powers being split in the UK between the FCA and PRA, it is now, more than ever, vital to ensure full compliance with such regulations, and to stay on top of the international rules that could affect you and your business. In this article, we take a brief look at the upcoming financial regulation aimed to be implemented now and in the near future.


Alternative Investment Fund Managers Directive (AIFMD)

Expected start date: 22/07/2013

AIFMD will look to regulate hedge funds, private equity and other alternative investment firms in order to monitor them and regulate their activity. AIFMs will have had to apply with their home competent authority by the 22nd of July, 2014 in order to comply with this regulation (Some firms are exempt, so to check if the AIFMD applies to you, check the European Commission website).

Market Abuse Directive (MAD II)

Expected start date: 01/07/2014

MAD I was introduced in 2005 to regulate market abuse and ensure there was a proper flow of information into the market. The idea was to increase confidence in the integrated European market and to introduce criminal sanctions for insider dealing/market manipulation. MAD II will widen the scope of the original regulation to include financial instruments traded on MTFs, OTFs and OTC.


Expected start date: 01/06/2015

Intended to make the financial sector more transparent, the MiFIR implements further review and regulation. An obligatory report will have to be filed, strictly detailing all transactions. A tool called UnaVista ), developed by London Stock Exchange, allows firms to manage their reports and negotiate regulations without having to worry.

UCITS V Directive

Expected start date: 01/01/2015

UCITS V is the latest version of the original UCITS regulation that was introduced in 1985. The UCITS directive aims to protect retail investors and covers three areas: depositaries, UCITS management company remuneration policies and sanctions for breaches of UCITS law. It will affect any stakeholder in a European UCITS fund, including asset managers and depositaries, with the ultimate aim being to benefit the end investor.