T-Minus One Year: It’s Now or Never on Mifid II
John hopes that preparations for the incoming regulation are top of the New Year’s resolutions pile for asset managers.
January is paradoxically the most optimistic and bleakest time of the year for some; while the cold, dark days are a far cry from the festive cheer just passed, it's also a time to make changes for the better, to be more than we have been in the past.
As such, it's rather fitting that Mifid II will finally be implemented on January 3 next year. While regulatory compliance isn't exactly optional, the industry has now reached its tipping point. For those firms that have yet to start work on implementing necessary systems or putting adequate policies in place, it's surely now or never.
Now you may be thinking, "Haven't we been here before though, John?" and you'd be right. Back at the start of September last year I said that the time for talking was over and that action was now required, despite the lingering vagaries around some key elements of the regulation.
And of course it's not as if each section of the regulation comes into force at the same time on January 3, 2018, with various parts spread out either over the course of this year or after next year's go-live date.
Generally speaking, there's no real reason for firms not be fully compliant by this time next year, especially when the year-long delay is taken into account. The question now is: How much longer will we be hearing that Mifid II preparations are either a top priority for asset managers, or, failing that, what the excuses for non-compliance in 2018 may be.
The MAR Test
My colleague, Aggelos Andreou, this week wrote about the buy-side's reaction to the implementation of the Market Abuse Regulation (MAR) in July last year, which introduced stricter rules around surveillance, market manipulation and insider dealing.
While it seems that the majority of the buy side were able to get their house in order prior to the new rules coming in, some took advantage of a more lenient approach by regulators to earn a period of grace. I'm sure that by now we've all heard similar stories of planned procrastination within certain sections of the market concerning Mifid II readiness, with some participants either hoping to be overlooked or simply preferring to take a fine instead of the arduous work required.
Whatever happens in January next year, much still needs to be done. While MAR can show some indications of the readiness of the buy side for complicated new regulation, Mifid II is an entirely different beast with many more tentacles to untangle. Will a year be long enough for those laggards that have so far dragged their heels? My feeling is that no, it really isn't.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Waters Wrap: The rise of AI washing… and regulation washing?
The SEC recently levied fines against two investment advisors over “AI washing”. Anthony takes issue with the announcement.
Prepare now for the inevitable: T+1 isn’t just a US challenge
The DTCC’s Val Wotton believes that firms around the globe should view North America’s move to T+1 as an opportunity—because it’s inevitable.
European firms prime for lopsided settlement in North America and at home
With T+1 imminent in North America and increasingly likely to traverse the Atlantic, operations and trading professionals in Europe are fighting on two fronts.
As crypto ETFs become reality, benchmark providers take center stage
The SEC’s approval of the first spot bitcoin ETFs will expose a growing number of traditional market participants to the maturing world of crypto data, a moment that some—such as CF Benchmarks, BlackRock’s benchmark provider—have been eagerly awaiting.
Waters Wavelength Podcast: Looking into the EU regulatory landscape
Eflow’s Ben Parker joins the podcast to discuss EU regulations.
FCA declines to directly regulate market data prices
A year-long investigation by the UK regulator to determine whether competition is hindered in the wholesale data markets has concluded with its decision not to directly regulate much-maligned data pricing and licensing structures.
Most read
- Women in Technology & Data Awards 2024: All the winners and why they won
- Witad Awards 2024: Above and beyond award (vendor)—Susan Bennett, Tradeweb
- Fighting FAIRR: Inside the bill aiming to keep AI and algos honest