Less than a quarter of North American buy-side firms well prepared for MiFID II
Well over half (58 per cent) of North American buy-side firms have confirmed that they will need to comply with MiFID II, and yet only 23 per cent feel extremely confident that they have a plan in place, while 77 per cent are either somewhat or not at all confident.
That’s one of the findings of a new poll by SimCorp which focused on the directive’s reach beyond the borders of the European Union. The poll, which canvassed the opinions of more than 150 buy-side participants from across 68 firms, was carried out in conjunction a SimCorp webinar in September – The Move Towards MiFID II: Ensuring Compliance for the North American Buy Side.
And with just 90 days to go before MiFID II comes into force, 28 per cent of poll respondents remain unsure if and how their firm will be affected. Fifty-six per cent meanwhile cited complying with transaction reporting requirements as their biggest MiFID II challenge, while other top concerns include: understanding the new market structure (50 per cent); and unbundling of research and execution (45 per cent).
“MiFID II is one of the biggest pieces of regulation to ever hit the buy-side industry, so I am not surprised by the extent of uncertainty and concern reflected in the research and poll results,” says Gernot Schmidt (pictured), Product Manager of MiFID II at SimCorp, and a speaker at the webinar. “The ability to aggregate data across asset classes, geographies, business lines and underlying applications will be essential. One way to do this is by adopting an IBOR architecture, which provides a golden record for positions and transactions, allowing asset managers to address many of the data requirements for MiFID II in one central application. This holistic approach also benefits the Front Office with better data for trading decisions and taking advantage of new trading venues emerging in the wake of the regulation.
“It also makes sense that the new transaction reporting requirements rate high on the list of concerns. Daily detailed transaction reporting will be expanded to a much larger set of instrument types, which will call for data gathered from additional source systems to be aggregated. This aspect of MiFID II also provides a compelling case for systems and data integration and increased automation.”