Christopher Woolard, executive director of strategy and competition at the FCA, said: "It is critical that those firms submit their applications now. The FCA does not expect to make any significant changes to these rules before they are finalised in June this year, and therefore firms should not delay."
Financial services regulations expert Elizabeth Budd of Pinsent Masons, the law firm behind Out-Law.com said: "Typically the FCA takes four to six months to consider and approve an application for authorisation. However, with the change in scope there are quite a lot of firms who now need to become authorised and if previous regime changes are anything to judge by, there may well be a log-jam. Any firm needing to obtain authorisation, or vary their scope of permission should make the application a priority."
The FCA will finalise the MiFID II rules in a policy statement in June. This will cover remaining issues including conduct of business, perimeter guidance, and client asset protections, it said.
The FCA has published the 'near final' version of its rules on the implementations of MiFID II covering changes to the trading of financial instruments including issues affecting trading venues, transparency of trading and algorithmic and high frequency trading, and an update on the taping of telephone conversations.
Previous proposals to have all financial advisers record conversations with their clients have been softened, allowing advisers to make written notes rather than record calls.
Under MiFID II, firms are required to record telephone conversations and electronic communications related to "the reception, transmission and execution of orders, or dealing on own account", and keep the recordings for at least five years.
In September 2016 the FCA proposed extending the requirement to tape telephone calls with customers to smaller 'Article 3' financial advisers.
In today's statement, however, the FCA said that "having considered consultation feedback in the context of MiFID requirements, the FCA agrees that the business model of many of these firms means that a full taping obligation may not always be appropriate".
Instead, firms can comply with the ‘at least analogous’ requirement by either taping all relevant conversations or taking a written note of all relevant conversations, it said.
"The decision to tape or take a note should be taken at the level of the firm rather than in relation to individual relevant conversations or the relevant conversations of different advisers", the FCA said.
Budd said: "The final rules on taping will not be known until the second policy statement which will be published in June. However, considering the systems issues involved in getting ready for the new taping regime, the adoption of a proportional approach by the FCA to permit retail financial advisers falling into the Article 3 exemption to make a written note rather than tape, is to be welcomed."
MiFID II comes into force on 3 January 2018. Once in force, MiFID II will revise and update the existing MiFID rules applicable to investment services across the European Economic Area (EEA). The revised regime is designed to take into account developments in the trading environment since the original directive came into force, and also aims to strengthen investor protection and increase market resilience.
The revised rules will also apply to a broader range of financial instruments, trading venues and techniques, notably the use of algorithmic high-frequency trading. These range from global investment banks trading complex securities to fund managers, stockbrokers and independent high street financial advisers providing advice to the general public.