Digiterre’s Rajesh Jethwa is named in the top 30 of the 2023 CIO 100
To keep you in touch with financial services regulations here’s a (hopefully) straightforward reminder and run through of MiFID II and its origins. We’ll also take a look at where we with it in 2019.
So, the snappily named ‘Markets in Financial Instruments Directive’ has been applicable across the European Union since as long ago as November 2007. It’s basically a cornerstone of the EU’s regulation of financial markets. It does two things essentially:
All of MiFID, in summary, aimed to remove barriers to cross-border financial services within Europe for a safer, much more transparent and evenly balanced marketplace as a whole. Then MiFID II came along…
Mifid II was introduced just over a year ago, in January 2018 and was designed to offer even greater protection for investors and inject more transparency into all asset classes: from equities to fixed income, exchange traded funds and foreign exchange.
Its benefits for firms, if properly executed include:
However it’s clearly a lot easier to say MiFID II than to actually implement it! The path to take-up is likely to be a long one and it has by no means been applied uniformly yet. The regulators are likely to have their work cut out now and for the foreseeable future. Amongst the reasons for the drawn out implementation is that, at 30,000 pages long, there are many complexities to MiFID II legislation.
According to Finextra in TSAM Insights, the findings of a survey carried out in 2018, which included entries from 100 European capital markets, revealed:
As we’ve said before, the headaches of successfully tackling MiFID II are not just for satisfying the appetites of the bureaucrats of this world, but are ultimately in the best interests of your firm’s customers. And this is the carrot side of the argument to encourage firms to take up MiFID II a little bit faster. However, the stick side of the argument, or regulator side, may ultimately be the bigger driver for financial services firms to comply – especially as the FCA (Financial Conduct Authority) is in an ever stronger position with better access to data, more data available and better analytics to assess financial organisations.
By: Rajesh Jethwa
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