The lack of final rules for Markets in Financial Instruments Directive II (MiFID II) is holding back implementation, but is only one of many problems faced by firms within the scope of the regulation. Other challenges include the regulation’s requirements in relation to non-equity instruments, particularly bonds, algo and high frequency trading, best execution, transparency, reporting and investor protection.
These and other challenges presented by MiFID II were discussed during a recent webinar hosted by A-Team Group and sponsored by Itiviti. A-Team chief content officer Andrew Delaney moderated the webinar, titled MiFID II – Practical Considerations for Gainful Compliance, and was joined by expert panellists Christer Wennerberg, vice president of market structure strategy at Itiviti; Kerstin Hermansson, managing director of the Swedish Securities Dealers Association; and Chris Pickles, an independent consultant.
The panel agreed that the list of MiFID II challenges is long and difficult to address as a result of delays in the publication of final Level 2 regulatory technical standards by the European Securities and Markets Authority (ESMA). It also agreed that the postponement of MiFID II compliance from January 2017 to January 2018 still presents a tight deadline, but should ease the implementation burden once final technical standards are available. Further delays for national governments to implement MiFID II were not ruled out.
The broad reach of MiFID II compared to that of its predecessor MiFID I brings many more trading firms into scope. Considering this aspect of the regulation, panel members noted that small and medium-sized firms may find compliance very expensive and suggested there is likely to be consolidation in the market, along with greater concentration on large trading firms.
To find out more about:
- Requirements of MiFID II
- Effects on different asset classes
- Changes to market structure
- Data management challenges
- Approaches to compliance
Listen to the A-Team Group webinar here.