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9th January 2018
Regulation Corner January 2018

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From 3 January 2018 all investment firms will need to comply with the requirements of new regulations, known as Markets in Financial Instruments Directive II (MiFID II). These regulations are designed to strengthen investor protection and further improve the transparency of the services that financial firms provide.

Some of the changes and their impacts are described below:

• Transaction reporting

With effect from 3 January 2018 we will need to report certain information to our regulator (the Financial Conduct Authority) about the clients for whom we are executing transactions and, in some cases, anyone associated with the transaction. For some categories of clients known as non-natural persons – such as Trusts – we will need a new identifier called a Legal Entity Identifier (LEI). Without this we won’t be able to deal on their behalf. Natural persons, for example individual and joint accounts, will require a National Person Identifier. In most cases this will be the client's National Insurance number.

• Valuation and 10% depreciation notifications

From 3 January 2018, we will provide clients with a portfolio valuation each quarter (currently every six months). In future, reports will be provided on valuations as at 31 March, 30 June, 30 September and 31 December. New regulations also require that we notify clients if the value of their portfolio decreases by 10% or more between reporting periods. This notification must be made within one business day. Whilst falls of this level are unlikely, they are possible.

• Effects of charges on returns

We will also provide clients with further information on costs and charges, such as underlying fund charges levied by fund managers, and their effect on portfolio returns. Our plan is to provide the information to clients annually, with the first report being provided at the end of December 2018.

• Changes to our Terms and Conditions

We will be making changes to various documents including our Terms and Conditions. Once our Terms have been updated they will be posted on our website.

If you have any queries, please contact our office on 01676 523 550.