The Breadth of MiFID II’s impact – The clock is ticking

Jul 12, 2017

Topics: Compliance | Regulation |

While MiFID II has been topping the media agenda for some time, the stark reality is that with less than six months to go, many firms still have significant work to do to get themselves ready.

Last month I spoke on a MiFID II panel at our annual conference in London and during the session we asked the audience of investment firms some key questions. According to the live poll, less than 12% of firms were “very confident” that they’ve identified all of the requirements of MiFID II applicable to their business. An overwhelming 77.7% indicated that they were just “getting there”, while 10.6% said they were “not very confident.”

Clearly, organisations need to determine how MiFID II affects their firm as soon as possible. Very soon they will need to be able to articulate to both regulators and investors how they have interpreted MiFID II in relation to their specific operations, and what the rationale is for that interpretation.

The firm will also have to articulate its MiFID II compliance plans, as well as specifying who owns the various MiFID II regulatory change projects, and what the governance framework is around them. It will be difficult for firms to “copy and paste” an approach from another organisation – the nature of MiFID II means that each firm will have to have its own distinct response.

One area of specific concern is the adoption of new technology solutions to help achieve MiFID II compliance. Surprisingly, three out of 10 firms believe MiFID II will not affect them from a technology perspective. While most do see a technology impact, many have yet to decide which technology applications will be implemented as part of their MiFID II projects. More than half of those who participated in the poll say they are either still evaluating the benefit of an external technology solution or are waiting to see what comes to market.

However, just under one-fifth have decided to go ahead with either an external solution or are building proprietary software. Some firms are considering the use of technology to assist with the monitoring of their best execution, to be able to demonstrate compliance with their policies and show to investors they consistently achieved the best possible result.

The panel discussion and poll made it clear that investment firms have a significant way to go to be compliant with MiFID II, and not long left to do it. The discussion supported this sense of urgency and encouraged action.

Cordium continues to work with firms on MiFID II compliance. We can help you with:

–       Impact analysis

–       Programme management and oversight

–       Project stream planning, execution and delivery

–       Compliance documentation, policies and training

Feel free to contact me if you would like to discuss the result of this polling or would like Cordium to assist you with your MiFID II implementation.