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Understanding MiFID II Could Be a Slog


March 06, 2018

MiFID II went into effect in January. But experts believe it will take a year or two to fully understand and implement it.

These experts were speaking at a London event staged by media company, TRADE. The organizer reports that 63 percent of attendees expect small changes to MiFID II over time. It adds that only 3 percent of attendees expect regulators to come out with MiFID III.

It also says experts expect MiFID II enforcement to be light out of the gate. And 46 percent of the audience do not anticipate seeing fines imposed in the U.K. for non compliance until the second quarter of next year. (The Financial Conduct Authority in the U.K. would be imposing the fines in this scenario.)

MiFID II stands for Markets in Financial Instruments Directive. It is a regulation that applies to financial services entities that do business in the European Union. Technically, MiFID II went into effect Jan. 3.

This new regulation makes it mandatory to record all conversations related to financial transactions on both personal- and company-owned mobile devices. It also requires those affected to hold on to those records for five years.

Some folks – like Deloitte (News - Alert) – have been advising financial services firms to get to work on MiFID II as soon as possible. That would seem to make sense, especially given this regulation has already gone into effect.

On the other hand, you could make the argument that it’s best to wait to construct a fully-formed MiFID II strategy and make investments related to it. This strategy would enable you to wait and see what exactly is being policed and how. The downside, of course, is to set yourself up for the potential of MiFID II non-compliance fines.




Edited by Mandi Nowitz

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