The sting in MiFID's tail
The seemingly-painless implementation of the much-feared Markets in Financial Instruments Directive (MiFID) on 1 November last year appears to have been met with relief by some in the financial services industry.
But does the fact the implementation date passed without too much hassle mean the venom has been drawn from the directive?
Under one of the requirements of MiFID, companies now have to keep more business records for longer, and they have invested heavily in the infrastructure necessary to record and store the required data. Many feel this has been adequate preparation for implementation of MiFID, particularly with the FSA estimating a total cost of £1bn to UK industry.
It is viewed as money well spent: companies are hoarding the data to demonstrate ‘best execution’ – to prove the best possible result on client transactions – reconstructing the complex variables of market conditions at any given time.
In making provisions to collect information, are financial decision makers right to believe they are immune from non-compliance? I don't think so. The real test for companies will be six to 18 months down the track when the first challenges under the directive arise.
To satisfy ‘best execution’, companies need to gather together all relevant strands of electronic and paper documents, including email, as part of the formal business records. An infrastructure led, unintelligent solution, will never be able to piece together these complex information flows.
We know that alongside infrastructure hardware, there must be intelligent systems software – the ability to use information effectively, to store, identify and access it. Maintaining the modern hybrid information mix of physical and electronic documents calls for full information lifecycle solutions where data is secure and working to meet business needs and those of increasingly tough regulatory regimes.
Additionally, finance is global so companies need an information management partner with global regulatory expertise to tailor solutions to unique geographic requirements.
Companies require tailored solutions to deliver managed, dynamic business information resources. In achieving this, financial decision makers can be confident that they will avoid MiFID’s regulatory sting.
*Andy Maurice is head of consulting at storage solutions provider Iron Mountain
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Tags: collect information, business records, information management partner, formal business records, financial decision makers, global regulatory expertise, mifid, markets in financial instruments directive, iron mountain, business information resources, regulatory regimes, client transactions, regulatory expertise, dynamic business, information lifecycle, electronic documents, andy maurice,
