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ISC's MiFID II Compliance Service

Background

The EU directive MiFID II (The Markets in Financial Instruments Directive) is set for implementation in January 2018. This Directive is being issued alongside its accompanying regulation MiFIR (The Markets in Financial Instruments Regulation). ISC is delivering projects to help our clients ensure compliance with this wide-ranging regulation that we have seen to have significant operational impacts.

The Impact on Our Clients

MiFID II (including MiFIR) has impacts across a number of key operational areas for the typical asset manager. These include:

  • Increased scope and level of transaction reporting across a much wider range of financial instruments, and to a greater level of granularity around decision makers and traders
  • Transparency to clients over costs and charges
  • Being clear, fair, and not misleading, particularly around issues that include, risk and client reporting
  • Suitability and appropriateness with respect to clients ability to bear risk
  • Ensuring best execution and publication of the quality of best execution
  • Additional maintenance requirements for appropriate telephone and e-communications records
  • Unbundling of research and execution commissions
  • Obligations around increased governance in respect of corporate policies including remunerations, conflicts of interest, product governance.

MiFID Objectives

One issue receiving a lot of attention is MiFIR, which mandates the reporting of almost all trades in financial assets and their derivatives. These trades are to be reported to National Competent Authorities (NCAs). The required data reported has been harmonised across Europe and includes personal details, trade handling and regulatory flags which determine the pattern of trade execution. There are many other aspects to MiFID II and MiFIR that require more change than the Transaction Reporting stream. Much of the change requires changes to new business processes or existing processes. Getting to grips with what needs to be changed is the initial challenge. This is followed by the need to agree and coordinate change with the various external parties involved in the trade lifecycle and reporting to clients and regulators.

Taking into consideration everything within the scope of MiFID II, this particular regulation is one of the biggest to have hit the industry, and achieving compliance means that the Regulators will have a window into market activity.

Our Approach to MiFID II Projects

We understand that each client is different. Our experience is that clients focus on the areas of greatest impact to them. There is no one size fits all approach and we are helping our clients to size, scope and deliver the appropriate change.

  • Understand the Issues - Our developed understanding of the issues created by MiFID II ensures that our clients are aware of the wide-reaching impact of MiFID II.
  • Impact Analysis - We perform an impact analysis against the current state to provide our clients with the necessary baseline.
  • Best Practice Overlay & Implementation Roadmap - An assessment of the current state overlaid onto best practice quickly identifies the gaps and helps build the roadmap that defines the project.
  • Project Structure - Practical advice as to how best to mix BAU and external resource that is structured into effective workstreams.
  • Project Assurance - Assurance throughout that efforts will lead to compliance and priorities are correctly assessed.

Why ISC?

The ISC team has experience of all functions within an asset manager as well as knowledge of how the exchanges, brokers, banks and other participants in the financial services industry operate.

ISC partner with our clients to meet their objectives through efficient project delivery. We augment your existing MiFID II projects by resolving capacity shortfalls in the Business Change Teams or IT Project Teams. We support your change managers with experienced consultants who are all experienced professionals that have successfully implemented many regulatory projects.

The skills acquired in delivering the operational change and reporting for one regulation are transferable. ISC always see our projects in terms of people, process and technology all underpinned by data. Regulatory projects are no different and the understanding of the data requirements is critical.

ISC MiFID II Compliance Service