Banks and capital markets institutions responding to Markets in Financial Instruments Directive (MiFID) II legislation may want to begin their preparations early. Finance and risk functions should be poised for change.
Understanding the business impact of the new requirements is one thing. Preparing for implementation is another—particularly when technology is an area of significant focus. MiFID II affects many areas within many institutions, but one of the biggest effects is within technology, where MiFID II implementation calls for carefully-considered technology solutions.
The draft of MiFID II technical standards were published in December 2014, with the implementation draft to be submitted January 2016, just one year before MiFID II’s go live date of January 2017. That gives financial institutions limited time to work through the technology impacts.
MiFID II requirements touch on several areas that reach into all aspects of a bank
or capital market institution’s business. They include themes such as:
MiFID II requirements will impact technology in each of these areas. Some of the
requirements, for example, involve:
An enhanced client portal, allowing client reports, costs and charges
Automated pricing, using various external data sources and tiered according
to client bracketing
Algo trading controls and enhanced testing scrutiny
A multi-phased deal booking model to allow required pre-trade transparency
within the desired timeframe
Enhanced lifecycle event (straight-through processing) to reduce trade reporting
breaks and manual intervention
Data provision from new sources to determine instrument and venue status.
Legal entity data to be accessible via an Application Program Interface
Managing Director, Accenture Finance & Risk Services
Based in London, he leads the UK and Ireland Finance and Risk Management consulting practice.
Associate, Accenture Finance & Risk Services
He has extensive industry experience across a number of areas within several leading financial institutions.