Merge1 can help you gain compliance easily, by leveraging your existing infrastructure.

The MiFID II Compliance Deadline Is Fast Approaching

Marketing August 30th, 2017 11:26 pm

MiFID II Background and Overview

As 2018 continues to get closer, the changes MiFID II brings to the EU and UK are becoming increasingly imminent. Specifically, the new MiFID II compliance regulations will come into effect on January 3, 2018. These laws, known as The Market in Financial Instruments Directive (MiFID), regulates activities of the Finance sector in the EU. The original regulations, MiFiD, were created in the UK in November 2007. After the financial crisis in 2008, MiFID was reviewed and the goals for MiFID II were created. The new policies of the MiFID II will be updating the old rules to consider changes the market has had since then. The goal of the MiFID II is to strengthen investor protection, maintain orderly markets, reduce risks, and increase market efficiency. The legislation emphasizes transparency to promote market stability, and achieves this through new rules regarding technology, cross-border controls, and conducting business in the EU and the UK.

Key MiFID provisions involve the following areas:

  • Organized trading facilities (OTF)
  • Systematic Internalisers (SIs)
  • Transaction reporting
  • Pre and post-trade transparency
  • Dark pools
  • High-frequency trading (HFT)
  • Open access
  • Restrictions for commodity derivatives
  • Investor protections
  • Consolidated tape
  • Third-country access
  • Synchronization of clocks
    (http://www.ey.com/Publication/vwLUAssets/EY-MiFID-II-client-brochure-the-world-of-financial-instruments-is-more-complex/$FILE/EY-MiFID-II-client-brochure-the-world-of-financial-instruments-is-more-complex.pdf)

Past MiFID Fines Foreshadow Future Penalties Under MiFID II
When MiFID was originally enforced, companies did not take the new regulations seriously. The first fine for non-compliance was given out to Barclays due to inaccurate transaction reporting. Barclays’ fined totaled to 2.45 million GBP for their inaccuracies between 2006 and 2008. (http://www.emirreporting.eu/fines-for-inaccurate-mifid-reporting/) Since the MiFID regulations have started being enforced “the FCA has officially imposed fines to 7 banks, 2 brokers, and 3 other companies” with the fines varying from “GBP 49,000 to GBP 13.2 million” (http://www.emirreporting.eu/?s=mifid+II). With the MiFID fines increasing, the the potential risk for Financial firms has grown greater.

MiFID II is intended to improve upon the old MiFID regulations that will included enhanced regulatory reporting. The legislation emphasizes transparency to promote market stability through new rules regarding technology, cross-border controls, and conducting business in the UK (as well as the EU). The effects of MiFID II will be felt around the world due to the cross-border implications.

Merge1 Helps You Easily Comply With MiFID II’s Archiving Regulations
Globanet Merge1 can help your Financial Services organization easily comply with the new communications archiving requirements of MiFID II by helping capture all of your firm’s electronic communications, from multiple platforms, and storing them in your existing email archive. This includes social media archiving (e.g. Twitter, LinkedIn, etc.), text, IM, financial platforms (Bloomberg, Symphony, etc.) and Cloud-based file services (e.g. OneDrive for Business). Once archived, your workforce’s digital conversations can be retained and supervised according to the MiFID II message retention and oversight rules.

In closing, we encourage you to comply with MiFID II’s social media and communications archiving regulations before the January 3, 2018 deadline to avoid the risk of steep, revenue-based fines and even dissolution. Merge1 can help you gain compliance easily, by leveraging your existing infrastructure.

Contact us today to learn more.