The MiFID II deadline is fast approaching, with the European Commission extending the it by one year from January 2017 to 3 January 2018. The thought that comes to mind is how long after that date will the fines be out? It is unlikely a further extension will be given so how ready are you?
There is a lot of information being shared about MiFID II and a hot question within the financial services industry is – what are the practical aspects that need to be considered?
Let’s take a look at the high level core measures of MiFID II. New rules and governance on record keeping: organisations will need to keep enhanced records of activities. What is the purpose of all this? MiFID II is also focused on investor protection for all clients, and promoting transparency, which means it is crucial to store and report financial transactions. This means that whether you are a large or small trading organisation, it becomes a fair and level playing field. How? It puts the onus on the regulated venue to conduct a safe and controlled trading venue and show not only where but now how trades are being conducted to expose ‘dark pools.’
With 7 months to go, what should we do practically? Take a look at what needs to be reported – look at the 65 data points from the Buy/sell and decision maker details through to the transmission and transaction information. Do you have this information? If not, how will you get this information stored or linked into a secure trade store. Be careful though, you are storing transactional information with user information – treat this sensitive information with the appropriate security. GDPR is coming and if the appropriate security isn’t applied, you could be looking at 4% of Gross revenue as a fine.
How is the regulatory and operational data you have stored over the past years linked to the transactional data? What operational processes are in place?
There is a lot is to do in a short time. Think about the regulatory data: How are you keep informed of external and internal MIFID activities? Data Management: how is the data is processed? Record keeping: evidencing the operational and transactional activities and timely reporting across all activities. Keep an eye on what is taking place in your organisation. What is already done for past regulations may be overlapped to MiFID II.
If you want to understand some of the overlapping themes, click here to view Pathlock’s MIFID II on-demand webinar.
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