The UK’s HM Treasury has published the legislation which redefines how the Ancillary Activity Exemption under MIFID II will be deployed in future. Following the publication of draft versions earlier this month, the latest version can be found here with an explanatory note here. The new legislation removes references to EU legislation, and the requirement to notify the FCA of the use of the exemption. It will apply from 2025. Following the consultation run as part of the Wholesale Market Review (see here) , a further consultation will be run by the FCA on how the test will actually be applied. This is mentioned in the latest version of the “Regulatory Initiatives Grid” (see here) as being planned for Q2/Q3.

A few weeks ago the FCA published this updated note updating the advice for UK entities on how to conduct the test in the meantime.