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MiFID II survey: 45 per cent of FIs ought to do more research

Chris Hamblin, Editor, London, 9 June 2017

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A survey conducted by IPC Systems at TradeTech Europe in Paris has found that 77 per cent of financial firms it approached believe their company is ‘prepared’ or ‘very prepared’ to obey the revamped Markets in Financial Instruments Directive on 3rd January 2018.

However, nearly half (45 per cent) of respondents said that they needed to do additional research to reach a full understanding of the effect that MiFID II will have on the way trading communications are to be recorded and stored. IPC approached a mixture of traders, CEOs, IT managers, brokers and other job functions related to the trading process to obtain the data.

The firm surveyed 103 individuals. It also learnt that compliance, compliance-related tasks and risk management comprised three of the top five biggest challenges for firms in 2017. Interestingly, there appears to be a slight difference in focus between buy-side and sell-side respondents. The buy-side ranks compliance-related issues highly, while sell-side respondents are more concerned with "gaining efficiencies and uncovering new sources liquidity."

Of the people surveyed, 82 per cent believed that the use of the Cloud will grow in financial markets, with 40% thinking of using it for "communication needs." Some 92 per cent felt confident or very confident that they could capture and archive data to satisfy regulatory demands.

Robert Powell, IPC's director of compliance, told Compliance Matters: “MiFID II is increasingly dominating financial firms’ agenda – and rightly so. These regulations don’t involve small updates that require little or no effort; they are driving major changes in the industry that could have severe repercussions if not adhered to. What’s interesting in this survey is that over three quarters of those asked are confident that they’re prepared for MiFID II, but this is contradicted by nearly half claiming they need to do more research into how this will impact communications. MiFID II will ultimately transform the way trading communications are recorded and stored.

“It is sensible to consider a move to the cloud. The cloud has matured over recent years and is increasingly being recognised as the next wave of innovation in fintech. It provides greater flexibility and maintains a level of security and efficiency that the financial markets industry requires under regulations such as MiFID II.”

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