MiFID’s impact in Germany has been minimal so far, agreed most of the German-based speakers at the JWG-IT conference, “Forum: Winning Through EU Regulatory and Risk Convergence,” held in Frankfurt this month. Dr Stefan Pankoke, deputy head of division of the German regulator Bafin, said it was “much too early to tell” whether MiFID will have a significant impact.

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Overall regulatory convergence is an important goal, but firms are likely to have to spend some €100 billion per annum on technology in support of various directives, delegates at the JWG-IT conference, “Forum: Winning Through EU Regulatory and Risk Convergence,” held in Frankfurt, heard this week.

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Many German investment firms have complied with MiFID as a box ticking exercise as they wait for clarification of rules from regulators, according to speakers at this month’s “Forum: Winning Through EU Regulatory and Risk Convergence,” held in Frankfurt.

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Financial Architects (FinArch) has launched version 3.0 of its regulatory reporting solution, Financial Studio Compliance. Compliance 3.0 provides users with web portal access and includes XBRL FinREP and CoREP reporting.

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Non-European regulators and investment firms are becoming increasingly aware of MiFID, as interest in adopting the directive outside Europe grows.

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UK connectivity provider Fidessa Group used this month’s Tradetech Europe event in Paris to announce its post-MiFID Intelligent Liquidity Access strategy, which is designed to help clients deal with what Fidessa expects will be the increasing fragmentation of liquidity between a broader array of execution venues.

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Telco GemaTech has launched a new telephony recovery and recording solution aimed at the dealing room. The system offers to help firms comply with MIFID’s business continuity requirements, as well as new voice recording regulations, such as those due to be introduced by the UK’s Financial Services Authority (FSA) next March (MiFID Monitor, March 2008).

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A recent measure from the European Parliament and Council has caused some confusion, with one industry think tank originally interpreting the measure as reducing the power of individual regulatory bodies. If true, the measure could affect a number of thorny outstanding issues, including best execution and transparency. Others, meanwhile, describe the measure as only concerning the relationship between the Parliament, Council and Commission, particularly Parliament’s right of scrutiny over decisions taken by the Commission under powers granted by the original directive.

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By Andrew Delaney, President & Editor-in-Chief, A-Team Group

MiFID is done and dusted. November came and went with nary a bother to speak of. There was no falling in of the sky. So, we don’t need to worry about MiFID anymore, right?

Wrong. To misquote our favourite and oft-repeated Churchillian phrase: November wasn’t the end. It wasn’t the beginning of the end. It was perhaps the end of the beginning.

We in Europe are living in a MiFID world. MiFID is now everything. It governs how investment services firms go about their business. And it reaches into other jurisdictions, meaning that while it’s an EU regulation, US Asian and other financial institutions are going to have to pay more and more attention to what it requires.

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By PJ Di Giammarino, CEO of JWG-IT Group Limited.

There is no room for scepticism in the post-MiFID world: the game has completely changed, and there is a set of new rules by which firms seeking continued success must abide.

In the aftermath the launch of the Markets in Financial Instruments Directive (MiFID), the boundaries and differentiators of a new and better marketplace stand clearly visible and those on top of their game are already working out their winning strategies.

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With MiFID nearly fully implemented, the European Commission says it plans to enlist industry help with its “quality check phase” of MiFID implementation. The Commission will ask for help from targeted industry trade associations instead of the more traditional public consultation route – the first time it has taken this approach.

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The EU/US Coalition on Financial Regulation, a group of 12 financial services industry associations including the London Investment Banking Association, SIFMA and the Swiss Banking Federation, is expected to publish a second report this March after what it claims was a “positive reaction” to its first report from 2005.

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MiFID poses no threats and offers very little in the way of short-term opportunities to the retail investment market, according to Dan Waters, director of retail policy and asset management sector leader, Financial Services Authority (FSA). He also blamed the lack of a “Big Bang” on MiFID’s staggered implementation in a speech given earlier this month titled MiFID – Threats and Opportunities. His speech also touched on best execution and the FSA’s enforcement plans.

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Level III Committees need a majority vote and their guidelines taken more seriously, and the costs of regulation need to be looked at more closely. The Lamfalussy process has worked well but could do with some improvements.

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By Anthony Kirby, head of regulation and compliance at Accenture.

This story begins and ends with digging. When Monnet and Schuman conceived the idea of the European Union and the Treaty of Rome was signed in 1957, the aspiration was to ensure the freedom of movement of goods, persons, services and capital, and the Common Market started with goods – iron ore and coal dug from the ground to be precise. Thirty years later, the progress towards the creation of a single market for all four domains was accelerated by the passage of the Single European Act in 1986, which introduced qualified majority voting and the principle of mutual recognition (needed to ensure harmonisation of the laws within each Member State). Subsequent discussions on creating a single market in financial services resulted in the tabling of a framework for action called the Financial Services Action Plan (FSAP) which was published in May 1999. The motivation for doing this was economic and threefold; first, to ensure that capital could be raised more easily by European companies intending to start up or innovate; second, that supply and demand for capital could be matched more effectively; and third, to ensure that consumers EU-wide could access a far greater choice of financial products.

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By Andrew Delaney, Editor, A-Team Insight Quarterly, A-Team Group

It’s a fascinating coincidence that two apparently similar regulatory regimes will come into force on either side of the Atlantic just weeks apart. The similarities between them – of purpose? implication? upheaval? cost? – are such that many market practitioners have confused key elements of Regulation NMS in the US and the EU’s Markets in Financial Instruments Directive, more commonly known as MiFID.

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There was little in the way of surprises in the latest policy statement (PS) from the U.K.’s Financial Services Authority (FSA). PS07-05, which offers perimeter guidance on MiFID, incorporates feedback received from the marketplace to the FSA’s two earlier consultation papers, CP06/09 ‘Organizational systems and controls – common platforms for firms’ and CP06/14 ‘Implementing MiFID for Firms and Markets.’ The FSA’s final guidance is contained in an annexe to the PS and will take effect from November 1.

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Although trading is now expected to start in early 2008, Equiduct is keeping busy by raising funding, increasing staff, preparing to launch its market data service offerings and commissioning a series of white papers.

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Europe’s financial institutions are increasingly keen to leverage the efforts they have put in to meet the Know Your Customer (KYC) requirements created by anti-money laundering regulations to help them comply with the KYC/client classification element of MiFID. This is the view of the KYC Alliance, which is targeting the “intersection between KYC and MiFID”, touting the benefits of a co-ordinated approach to both.

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