Not All Prepared for New Trading Comms Rules
A survey conducted by IPC Systems at TradeTech Europe (April 2017) has found that 77% of financial firms surveyed believe their company is ‘prepared’ or ‘very prepared’ to enforce MiFID II regulations when they come into effect on 3rd January 2018. However, nearly half (45%) of respondents claim they need to do additional research to fully understand the impact of MiFID II on how trading communications need to be recorded and stored.
The study, which surveyed 103 individuals* also revealed that compliance, compliance-related tasks and risk management comprise 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. Buy-side ranks compliance-related issues higher while sell-side respondents are more concerned with gaining efficiencies and uncovering new sources liquidity.
Finally, 82% of those surveyed believe the use of the cloud will grow within financial markets, with 40% considering using the cloud for communication needs. 92% of those asked feel confident or very confident that they can capture and archive data to meet compliance regulations.
Robert Powell, director of compliance at IPC Systems, has the following commented: “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 is wide and varied, and businesses need to make sure they are aware of all of the articles. Stricter governance requirements and enhanced investor protection will be key under these regulations, but communications should not be overlooked. MiFID II will ultimately transform the way trading communications are recorded and stored.
“It’s no surprise that compliance is a consistent challenge for firms, particularly as the financial industry regulation becomes much less forgiving. Moving, or considering a move to the cloud, is a sensible step. 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.”
*Individuals surveyed were a mixture of traders, CEOs, IT managers, brokers and other job functions related to the trading process
(Source: IPC Systems)
