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Tapping technology helps boost response to MiFID II requirements

Leveraging new and existing solutions can help financial firms go beyond MiFID II compliance.

When Markets in Financial Instruments Directive II (MiFID II) legislation was announced, financial institutions were put on alert about a number of business changes they will need to make within two years, prior to the compliance deadline. The changes affect many areas of a financial business—but notably, many of them involve technology, and will test an enterprise’s ability to build appropriate technical solutions.

In fact, exploring the business lifecycle through a technology lens illustrates how MiFID II in many ways is a technology challenge.

Here is a sampling of some technology areas that can support a financial institution in meeting its MiFID II requirements:

  • Client: Investor protection is essential, and tools such as enhanced client portals and mobile dashboards can help.

  • Pricing and risk: Tools such as automated pricing, tapping external data sources, can be tiered according to client bracketing.

  • Execution: Algorithmic trading controls and enhanced testing scrutiny, alongside venue connectivity and automated workflows, support effective trade executions.

  • Trade capture: Among other tools, multi-phased deal booking supports required transparency within an appropriate timeframe.

  • Trade lifecycle: Straight-thru processing of advanced lifecycle events minimizes trade reporting breaks and manual intervention.

  • Data: Additional client data requirements and real-time accessibility can be performed through various applications.

Technology can play a significant role in complying with MiFID II—whether it’s about adjusting existing technology or adopting new technology. For financial service providers, the key is to have a holistic view and approach, focusing on not just complying, but on capturing greater value from the regulatory response.

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