Gina Miller, the woman who successfully challenged the government on Brexit, is threatening to sue the UK’s financial regulator, the Financial Conduct Authority over its dealing of MiFID II, it has been reported.
MiFID II came into force on 3 January and is an EU wide directive that adds more stringent rules for financial markets, in a bid to raise transparency in the sector.
Miller reportedly is threatening to sue the FCA for exemptions that larger institutions received, effectively longer periods of time in order to be compliant, resulting in “an anti-competitive market.”
A key requirement of MIFID II compels firms to disclose all costs and charges before the client makes the investment.
But Miller is said to be arguing that funds that have already become MIFID II-compliant look more expensive, than those who have yet to be become compliant.
In September the FCA said it would not fine all firms if they were not compliant on 3 January so long as there was evidence that the firms had taken sufficient steps to become compliant.
Furthermore, the European Securities and Markets Authority in December granted firms a six-month extension to ensure that they obtain a Legal Entity Identifier code.
MiFID II requires all market participants to have an LEI code- a unique 20-character alphanumeric code- in order to engage in trading activity.
ESMA has acknowledged not all companies would have the code in time as venues that trade securities, but issued by non-EU companies are also impacted.
Miller reportedly said: “We want the FCA to assure us they will put into place a deadline for people to have a formula for reporting costs that means everyone is reporting in the same way.
“The FCA needs to put a hard date in the sand [for firms to comply] or start fining people.”
Miller, who is the co-founder of wealth management boutique firm SCM Direct, is said to have launched an audit of competitor wealth and fund managers to see if there is a case. The investigation is expected to be wrapped up before spring. Upon completion of the investigation, Miller will seek a meeting with the FCA.
Miller is also said to be in talks, with investor groups and pension funds about taking legal action against asset managers that may have mis-sold investments based on misleading fee information.
She was reported as saying: “This could be bigger than PPI,” referring to the mis-selling scandal where banks sold customers insurance products without their consent.
The FCA did not comment on the issue of a threat to sue from Miller regarding its handing of MiFID II.