MiFID II – have firms woken up to the progress of their project plan in time?

Firms are finally all waking up to MiFID II, but are some firms too late? The proactive ones are well into their project plans and are already testing their enhanced transaction reporting processes. My concern is that there are going to be a serious number of participants that are not ready and if this is the case what are the Regulators going to do about it?

The FCA has sent out letters to firms requesting information on how they are progressing with everything to date. My question is how many firms have received these letters and are they asking the right firms?

If the Regulator takes a hard line and instigates disciplinary or enforcement action against offenders what is the systemic risk to the Financial Services market? There has been a growing trend to outsource functions by firms where they do not have the relevant experience in-house which makes sense. However, it is times like these that make strong outsourcing controls so relevant. The regular meetings with your outsourcers are vital and MiFIDII should have been on the agenda for months now. If the outsource provider is not ready what will be the effect on your firm and if the outsourcer provides services to a number of other firms what will be the systemic risk?

I am horrified to hear from a number of system outsource providers that their clients are not even asking about MiFID II progress, even now. It makes you wonder if the right person in the firm is managing the outsourcing relationship. If it is purely the procurement department, then it is definitely not.

The bottom line is that firms need to make sure MiFID II is being managed in respect of all aspects of their business. The Regulator needs to be strong to make sure all firms are ready and those requests for update information or “Dear CEO” letters should cover the whole market.

If the whole process is not managed correctly by firms and Regulators the systemic risk could be significant and the last thing the UK financial markets want at this time is another scandal or disciplinary action against firms that could be easily avoided. We all have a responsibility to Mrs May to help get the best deal for the UK financial services industry.

MiFID II is coming; Regulators and firms make sure you are ready.

Barry Howard

Partnership Advisor

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