MiFID II is here but the regulators have only just got startedshieldadmin
By Shiran Weitzman, CEO, Shield Financial Compliance
MiFID II may have come a little too quickly for some companies. Its scope, the slow pace of its formulation and the myriad interpretations of its applications and implications meant much of the EU’s financial services industry had to rush through changes to comply with it.
Many firms struggled to meet the January 3 deadline despite hundreds of City workers spending the Christmas break – their holiday leave cancelled – rushing to put processes in place in time for the 3 January deadline. That so many companies were ready in time is an achievement in itself, given that a significant portion of MiFID II’s new rules were still being formalized as recently as July.
The race against time appears to have been particularly challenging with regards to implementing MiFID II’s wide-ranging rules on record-keeping of electronic data communications. By necessity, companies have done what they could to ensure their archival processes meet the new demands of transparency, accuracy and easy retrieval.
Where a firm has had to take a more tactical approach to compliance, many have found themselves with a patchwork of voice, e-mail, and data recording platforms, with a minimum level of interoperability.
On this basis, it’s likely that many companies only just managed to cross the compliance line with setups that could be impractical to change, expensive to maintain and that could potentially expose companies to future regulatory breaches at a time when watchdogs wield tough punitive powers.
In this upcoming series of blogs, we will explore how firms can take an increasingly strategic approach to the organisation of record-keeping processes for electronic data communications. Benefiting from a unified approach to data capture, analysis and storage which could both meet best practice standards and ensure accuracy, reliability and efficiency delivering sustained compliance in a fast-changing regulatory environment.
We’ll examine how a holistic platform can streamline front- and back-office interactions, how it can prepare companies for the next regulatory upheaval – the General Data Protection Regulation (GDPR) in spring – and what impact it will have on compliance.
Also, we will show how an interoperable solution can aid in combating market abuse and in meeting new benchmark regulations, as well as help drive companies forward with improved data management.
We will discuss ways that the fragmented, stop-gap systems put together to meet MiFID’s deadline can be vastly improved with pioneering solutions that link record-keeping and data-management platforms.
We know for certain that MiFID II is not finished yet. EY estimates the new rules won’t be fully implemented for another six months. We also know that this is just the start of a sea-change in the regulatory environment that has been welling since the financial crash of 2008; there are a lot more reforms to come.
Even MiFID-compliant companies are not in the clear. The data capture and archival systems they’ve installed may be sufficient right now, but it’s anyone’s guess how relevant they will be in six months, or even a year.
Now is the time to review those processes and to ensure they are more than adequate so that the next tide of regulations doesn’t become overwhelming. Now it is time to think Strategic.