The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Firms Failing to Meet MiFID II Reporting Requirements – Vendors Can Help

Subscribe to our newsletter

We are almost two years on from MiFID II implementation and yet there are still gaping holes where firms continue to struggle with the burden of mandatory reporting requirements brought in by the regulation. Around 50% are not yet monitoring their reporting daily, according to the second annual MiFID II & Best Execution survey from Cappitech, while almost two thirds (61.4%) are failing to monitor best execution, despite this being a key requirement.

The results show that even as we reach the regulation’s second birthday, firms are still struggling with reporting quality and processes. Key challenges include reconciliation, which 44% of firms identified as their primary pain point. Feedback is another – with over two thirds (68%) of respondents reporting that they have not yet received comments on MiFID II compliance from their national regulators. Of the 32% that have, none have yet been fined – but this relaxed approach is unlikely to last forever.

“The survey results point to firms still not being fully comfortable with MiFID II reporting requirements,” says Mark Kelly, author of the report and member of the Cappitech Advisory Board. “At the beginning of 2019, firms had told us that this year would be one of setting KPIs and reviewing data quality, but this process is clearly happening more slowly than anticipated. The use of external analysis and tools to spot problems may alleviate some of these challenges on the basis of ‘don’t mark your own homework’ which will be important as the regulators will start to impose sanctions on firms who are not managing their data appropriately.”

While 68% of firms plan to use existing reporting solutions for future regulatory requirements, a further 64% believe that it is important to have one solution across all reporting regimes, suggesting that there is a gradual move towards an enterprise-wide approach instead of the ‘fill-the-immediate-gaps’ model. But to meet the requirements, as the regulators begin to tighten their approach, it is crucial to engage with the correct counterparties to enable effective oversight.

“We believe that third party providers are a good way to overcome these challenges by providing domain expertise gained through dealing with many similar clients,” comments Ronen Kertis, CEO and Founder of Cappitech. “Using the right vendor also helps address the other clear preference raised by 64% of respondents saying it is important to streamline their reporting obligations by using a single solution or vendor.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Managing culture and conduct: Is your organisation compliant with the Senior Managers and Certification Regime (SMCR)?

The FCA’s Senior Managers and Certification Regime (SMCR) came into play in the UK banking sector in early 2016, with the aim of reducing harm to consumers and strengthening market integrity by creating a system that enables firms and regulators to hold individuals to account – and it is not going away with the FCA...

BLOG

Can You Prove Risk-Based e-Comms Surveillance Outcomes Have Merit?

By Robert Houghton, Founder, CTO and Technical Evangelist at Insightful Technology. The elephant in the room whenever a discussion turns to risk-based surveillance is the fact that many Compliance Officers do not have complete confidence in their data. There are currently no parameters from the regulators of the financial sector to permit risk-based surveillance, yet...

EVENT

Data Management Summit Virtual (Redirected)

The Data Management Summit Virtual brings together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

Regulatory Data Handbook 2021/2022 – Ninth Edition

Welcome to the ninth edition of A-Team Group’s Regulatory Data Handbook, a publication dedicated to helping you gain a full understanding of regulations related to your organisation from the details of requirements to best practice implementation. This edition of the handbook includes a focus on regulations being rolled out to bring order and standardisation to...