Are you ready for the Day of the MiFIDs?

'The Day of the Triffids' is a famous novel by John Wyndham in which a species of super-aggressive plants takes over the world when a meteor shower causes a plague of blindness across the human population.

Now, the introduction of MiFID II (hopefully) doesn't herald the end of the world! But the directive is a huge piece of legislation - and like the people in Wyndham's post-apocalyptic masterpiece, some organisations may not be seeing clearly.

A recent JWG survey revealed that 90 per cent of buy-side firms are at risk of non-compliance when the deadline hits on January 3rd, 2018. Meanwhile, figures from Aeriandi showed that 73 per cent of risk and compliance officers in the financial services sector weren't fully aware of MiFID II penalties.

How worried should I be?

We're not in the business of scaremongering, and recent comments from the FCA's director of enforcement and market oversight, Mark Steward, may come as somewhat of a relief for firms worried about non-compliance.

He acknowledged that MiFID II is a significant undertaking - one that has required complex re-tooling and preparation for businesses, many of which don't have the same resources as their larger counterparts.  

"This means we have no intention of taking enforcement action against firms for not meeting all requirements straight away where there is evidence they have taken sufficient steps to meet the new obligations by the start date," he explained.

So, some leeway will be given if businesses aren't 100 per cent compliant in time for the deadline. That's the good news. But Mr Steward was clear that the regulator will take a dim view of firms that have "deliberately flouted" the directive and made "no real or genuine effort" to comply.

Transaction reporting rules are among the key obligations with which firms are expected to comply from the get-go.

Ultimately, it's in every business's best interests to take MiFID II seriously, given non-compliance penalties can run as high as €5 million or ten per cent of revenues.

Preparing for the Day of the MiFIDs

By now, most organisations have MiFID projects well underway; if not complete.

But what if you're one of the 29 per cent of companies that Aeriandi claims don't have the necessary technology or infrastructure in place? Maybe you're one of the 64 per cent that haven't quite finalised essential policies and procedures?

At Barclay Simpson, we've seen a significant rise in demand for interim regulatory compliance consultants with MiFID II experience. In fact, MiFID II skills are highly sought-after across the board, as organisations bring in additional resources to ensure they make it over the finishing line in time.

Interim consultants can offer:

·        Recent, relevant experience of working on MiFID II projects;

·        Insight into how other businesses are approaching compliance;

·        Broader guidance and advice on upcoming regulations;

·        Spare capacity for strained departments; and

·        A fresh perspective to optimise checks and balances.

Whether businesses want subject matter experts to deliver projects or additional capacity for 'business as usual' tasks while in-house staff tackle MiFID II, interim consultants can provide the flexibility and skills required.

The Day of the MiFIDs is coming this January. It may not be the end of the world, but it pays to be prepared, and Barclay Simpson is well placed to help if you're concerned about MiFID II.

To discuss any potential interim requirements, please contact me on 020 7936 8904.