As financial firms across the globe race to ready their entire business to meet the new mandates of MiFID II they must focus on implementing systems and solutions to meet the new regulations.
MiFID investment firms are truly under time pressure to insure that they will meet the regulatory requirement for transaction reporting which goes into effect in January 2018. Nick Bayley with Duff and Phelps proposes, in MiFID II 90 days and counting…,that the FCA will potentially focus more on transaction reporting requirements than previous reporting regulations for investment firms.
"Interestingly, in the past it has been far from clear that the FCA looks at the completeness of its reporting population; I think that may change this time with the large number of buy-side firms on the hook for reporting for the first time" - Nick Bayley
Global investment firms are well aware of the research unbundling impacts of MiFID II and working diligently to insure their research needs are met. Firms will work with their existing research providers to insure they are meeting the regulatory requirements as well as new research providers, including alternate market data providers, in an effort to shore up compliant research for their entire investment life-cycle. A recent article in The Trade highlights that some firms will be using RFQs (request for quote) to meet their research needs while insuring compliance with the unbundling mandate from MiFID II. Importantly The Trade does note, in Traders warned not to become reliant on RFQs after MiFID II, that trader must be careful that their RFQ process does not lead to information leakage.
While firms race to meet the mandates for MiFID II and prepare for scrutiny from the FCA, it is important to note that the regulatory body may be more forgiving in the early days of MiFID II to firms displaying dedicated good faith efforts to meeting these new regulations. Nick Bayley again highlights this approach - "FCA will inevitably look more favorably at firms that have made an effort to engage with investors and keep them updated on new disclosure requirements, rather than those who have not got around to it. "
The Path Forward
At RelateTheNews we advocate the no delay approach to meeting the ever changing regulatory environment. For firms facing the fast approaching deadlines for MiFID II we understand that you are facing increasing complexity and compliance requirements throughout your firm. Our alternative market data has been proven as one form of competitive data to use in the research process and through the entire investment lifecycle. Contact us today to let us help you meet the requirements of unbundled research which can provide an edge in the markets.