In light of the current review of MiFID going on at the European level, the MiFID Joint Working Group (JWG) is set to reconvene at the start of June to discuss the key business and IT related issues. One such issue will be the impact of all this regulatory work on the reference data space, an area that PJ Di Giammarino, CEO of think tank JWG feels has been too often overlooked during recent discussions on MiFID.
The MiFID JWG, which was initially established by industry associations including FISD, FIX Protocol and ISITC Europe back in the heady days before the directive was implemented, has indicated that the upcoming reunion meeting will be a chance for industry participants to discuss the numerous issues that the Committee of European Securities Regulators’ (CESR) MiFID review process has raised. The group ambitiously hopes to cover a wide range of subjects encompassing both front and back office agenda items such as trading and best ex, real-time market data, reference data, standards and industry protocols.
Di Giammarino is hoping to ensure that the meeting covers the recently overlooked area of data standardisation within the remit of MiFID mark two. “There has been a real focus on the scope of the regulation but very little discussion about the details of implementation,” he notes. Reference data items such as the mandatory inclusion of Bank Identifier Codes (BICs) in transaction reports is one such detail that has not seen much attention from the industry as a whole.
He notes that a lot of these discussions have been sidelined by other concerns but also that a lot of this detail has been included in the appendices of the mountain of regulatory papers issued this year. Hence the subtlety of these proposals has been lost on the compliance and legal teams charged with reviewing the relevant regulatory documents.
“These details, however, will require a significant amount of work on the part of financial institutions to implement,” says Di Giammarino. “The introduction of mandatory data standards will result in a barrage of requirements to alter the data supply chain and tie things like entity and instrument identifiers together across financial institutions.” He indicates that a lot of this work will therefore come down to understanding the data supply chain as it currently stands and putting in place service level agreements to ensure the required data sets are kept current.
Expect these and many other related issues to be raised at next month’s meeting. The MiFID JWG will be meeting on 9 June in London and more information can be found by visiting the FISD, FIX Protocol and ISITC Europe websites.