1. Welcome to Legal Shorts, a short briefing on some of the week’s developments in
the financial services industry.
Listen to this week's Legal Shorts on CLTV by going to
http://vimeo.com/cummingslaw
If you would like to discuss any of the points we raise below, please contact me or
one of our other lawyers.
Claire Cummings
020 7585 1406
claire.cummings@cummingslaw.com
www.cummingslaw.com
FCA’s new MiFID II webpages
The FCA has published a set of new webpages on MiFIR which are
designed to help keep people up to date on developments relating to MiFID
II. The webpages address a number of topics, including: (i) what firms will
need to do; (ii), a summary of the significant changes proposed to the
Markets in Financial Instruments Directive; (iii) the MiFID II legislative
process; (iv) MiFID II implementing measures and transparency
calculations; and (v) ESMA’s consolidated list of trading venue
identification codes. Those interested in receiving MiFID II email updates
from the FCA can register with the FCA via its website.
FTT
It has been reported that finance ministers from 11 eurozone countries plan
to form a legal basis for a phased-in tax on financial transactions that would
be implemented in 2016. Meanwhile, the German Finance Minister
Wolfgang says a proposed tax on financial transactions in 11 eurozone

2. nations should first tackle shares and certain derivatives and in the UK,
George Osborne has said that the UK is within its rights to challenge the
FTT should it affect non-participating European countries. It is reported that
the UK’s legal challenge might be backed by Sweden as its dissatisfaction
with the proposal grows. The Swedish Finance Minister Anders Borg is
quoted as saying "We did not support the U.K. when they started this legal
case; we are much closer to doing that, because the process has not been
satisfactory during these last few months."
Agreement to MiFID II requested
The Council of the EU has asked the Permanent Representatives Committee
(COREPER) to confirm its agreement to the position on the MiFID II
legislative proposals adopted at first reading by the European Parliament on
15 April 2014. The Council's requests concern the proposed MiFID II
Directive and the proposed MiFIR. If the Council approves the Parliament's
position, the legislative acts will be adopted, and after being signed by the
President of the Parliament and the President of the Council, will be
published in the Official Journal of the EU. The Council published the texts
of the proposed MiFID II Directive and MiFIR on 1 May 2014 in advance of
its formal adoption of MIFID II.
Proposals for best practices for T2S markets' migration to T+2
On 6 May 2014, the ECB published proposals by the TARGET2-Securities
(T2S) Harmonisation Steering Group (HSG) for best practices for T2S
markets migrating to the T+2 settlement cycle on 6 October 2014. The HSG
established a task force on T+2, whose primary aim is to ensure co-
ordination across T2S regarding the change in settlement cycle and to
minimise the impact of moving to T+2 for market participants. The
proposals are set out in the following three sections: (i) Section 1 covers the
scope of the T+2 settlement cycle; (ii) Section 2 focuses on the migration
plans of markets to move to the T+2 rule; and (iii) Section 3 aims to provide
some ideas in the context of the move to T+2 for the timely completion of
the post-trade and pre-settlement activities, as well as the monitoring of
matching timeliness and settlement fails. The ECB has also published a
letter from the chairmen of HSG and T+2 task force to ESMA’s Head of
Markets Division. Among other things, the letter states that in addition to the
ECB, the HSG has also sent the proposals to ESMA and the European
Commission for their consideration.

3. FCA Handbook Notice 11
Handbook Notice 11, setting out changes made to the FCA Handbook under
instruments made by the FCA Board on 27 March and 1 May 2014, has now
been published.
FCA policy statement on competition in the markets for services
provided by a regulated investment exchange
The FCA has published a policy statement on competition in the markets for
services provided by a recognised investment exchange (RIE) (PS14/6). The
FCA has previously consulted, and the policy statement provides feedback
on responses and sets out the changes to the FCA's Recognised Investment
Exchange and Recognised Clearing House sourcebook (REC). One
modification amends its proposed change to REC 6.7 (notification rules for
overseas recognised bodies) to limit the scope of the obligation to events
having a "material" effect on competition to bring this in line with the rule
applicable to UK RIEs. The handbook instrument, which is included in an
appendix to the policy statement, also provides that the change to REC
3.26G (proposals to make regulatory provision) comes into effect on 2 June
2014, giving UK RIEs some time to review and update their procedures for
making notifications. The other changes to REC came into effect on 2 May
2014.
HM Treasury review of FCA and PRA enforcement decision-making
HM Treasury has published a press release announcing both the launch of a
review of the processes for enforcement decision-making at the FCA and the
PRA and a call for evidence. The call for evidence sets out the review's
terms of reference and will consider the design and governance of the
institutional arrangements and processes at the FCA and PRA. Items it will
consider in "the key decision points" are those relating to: (i) the interface
between supervision and enforcement, particularly the decision making
process for referring cases for enforcement investigation and possible
action; (ii) the approach adopted by the regulators to co-ordinating
investigations and enforcement action; (iii) the arrangements for the subjects
of enforcement action to understand the case against them and to make
representations to the regulators; (iv) the operation of the settlement process,
including the incentives for early settlement; (v) the operation of the post-
investigation administrative processes for reaching disciplinary decisions in
the FCA and PRA; and (vi) the review will consider the composition and
accountability of the decision making committees, the degree of separation
of the decision making process from the investigatory process and the

4. arrangements for referring cases to the Upper Tribunal. Responses are asked
for by 4 July 2014.
Designation of global systemically important reinsurers postponed to
November 2014
The Society of Lloyd's has updated its webpage on systemic risk to report
that it has recently been announced that the list of major reinsurers
designated as systemically important has been further delayed from July
2014 to November 2014. The Lloyd's webpage states that the International
Association of Insurance Supervisors has said that, whereas the
methodology for the first nine global systemically important insurers
focuses on non-traditional or non-insurance activities, for reinsurers the
issues relating to substitutability and interconnectedness are more complex
than for insurers and require further study and analysis.
FCA publishes protocol and updated terms of reference for
independent inquiry
The FCA has published a press release announcing that the non-executive
directors of the FCA board have published the protocol for the conduct of
the independent inquiry into the handling of the FCA's March 2014
announcement of proposed supervisory work on the fair treatment of long
standing customers in life insurance. This protocol sets out the procedures
under which the inquiry is to be carried out, reflecting the requirement for
the inquiry to be, and to be seen to be, independent. The non-executive
directors have also published updated terms of reference.
Markit IPO
The press reports that London-based Markit has filed for an initial public
offering in the US.

5. CYCLING SHORTS
From Gavan McGuire from Centaur Fund Services:
On the 10th of August 2014 I will compete and complete (I hope!!) the 100
miles of RideLondon Cycle Race to raise money for Great Ormond Street
Hospital.
I am very fortunate to have two wonderful and healthy children, however I
am are aware that many parents have not been as lucky - I have an
opportunity to help raise some much needed funds for GOSH and delighted
too - as every little bit helps and if what I raise makes the difference to one
person it will all be worthwhile.
It will be no mean feat to haul my not too slim frame a 100 miles around the
London roads and Surrey Countryside - I will be very grateful for every
pound you donate.
You can donate on: http://www.justgiving.com/Gavan-McGuire or by
texting: GMCG99 £(the amount your wish to donate) to 70 070
Thanking you all very much in advance.
Gavan McGuire
Gavan.McGuire@centaurfs.com
Cummings
Tel: + 44 20 7585 1406
Mob: + 44 7734 057 327
www.cummingslaw.com
9 May 2014