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.
![jan-new-year jan-new-year](/sites/default/files/styles/landscape_750_463/public/import/IMG/775/359775/jan-new-year-580x358.jpeg.webp?itok=PPrnN42i)
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.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
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. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
This Week: FCA, Plato/Turquoise, Franklin Templeton, and more
A summary of the latest financial technology news.
Insurers deny cyber premiums are rising
Contrary to banks’ complaints, underwriters and brokers claim current market for policies is soft.
Size matters: US equity market players wrangle over new tick size regime
The industry expects the SEC to finalize the Reg NMS shake-up as soon as late summer. While there is broad agreement about the need for change, the extent of the reduction in access fees and tick sizes will have a big impact on markets.
CME: CFTC OKs clearing move to Google Cloud
The CFTC has given the Chicago-based exchange approval to run its clearing and settlement infrastructure on the Google Cloud Platform, while the exchange and vendor have extended their partnership to last until at least 2037.
Cutting through the hype surrounding the FDTA rulemaking process
A bill requiring US regulators and institutions to adopt a machine-readable data framework for reporting purposes applies to entity identifiers, but not security identifiers, in a crucial difference, writes Scott Preiss, SVP and global head of Cusip Global Services.
Northern Trust offers internal fund accounting, data tools to clients
Regulations and a mandate to enhance quality and transparency in a bid to improve the investor experience are pushing buy-side firms to have more oversight of their third-party providers.
EU firms press for faster move to T+1 after smooth US rollout
Following the example set by North America, 70% of attendees at a European hearing on shorter settlement cycles favored a Q4 2027 switch to next-day settlement.
Finra clears hurdle with CAT launch, but several others remain
Two major components of the consolidated audit trail are now in place. But wrangling over the CAT’s future continues.