In line with long-established standards, the FCA will not commit to authorising firms in time for MiFID II next Jan unless they had applied by 3 July. This makes sense, and firms have known about this deadline for a long time. However, there are two elements of potential brinkmanship about it.
First is the not very veiled warning of the actions the regulator might take against firms who operated after 3 Jan 2018 without the right MiFID II permissions. Here the FCA is betting on there being few if any culprits - more than that and its capacity to take credible action may be stretched.
The other part is the FCA's implied confidence that firms who are critical to the market's effective operation already have their applications in the system. If the regulator and/or firms have got this wrong, disorderly markets are the likely result.
The FCA seems to be well ahead of most other EU regulators in its MiFID II implementation but it's also true that the size and complexity of the London markets means the stakes are much higher. Hopefully everyone will have done enough, including behind the scenes, to get this one right.
We expect any firms who have not submitted a complete application by 3 July 2017 to do so without further delay. We will determine complete applications received after 3 July 2017 within 6 months, but we cannot guarantee to do so by 3 January 2018.