Matt Smith, founder and CEO, SteelEye:
“The implementation of MiFID II is a landmark day for the financial services industry, both in Europe and globally. Although the focus of MiFID II’s sweeping measures is on EU financial services firms, the far-reaching nature of many of its provisions mean that it will have an impact on firms worldwide that do business with European financial services entities and investors too. It marks the continuing process, begun with the original MiFID regulation in 2007, of supporting and strengthening Europe’s single market in financial services and investment products. Indeed, its greatest benefits are likely to be increased financial markets transparency, reduced risk and enhanced investor protection. All factors that will help build a fairer, more efficient and sustainable financial services industry.
MiFID II covers a much broader range of asset classes, including stocks and bonds, commodities, currencies and derivatives. Virtually everyone in the financial services sector is covered, from banks, fund managers, stockbrokers, hedge funds, commodity firms, day traders to individual investors.
This broad reach of MiFID II has presented the whole range of financial services firms covered by its measures with some major challenges. Most firms will have prepared adequately ahead of today’s implementation date. However, for those who have not, it is important for them to remember that regulators are prepared to show leniency for non-compliance only if firms can show they have started to take relevant steps and are making good progress in their efforts to comply with the new MiFID II rules.
Across the market, when comparing larger and smaller firms, there is significant variation in their readiness, with many smaller firms that do not have the extensive operational resources of their larger peers lagging behind in terms of their preparations. Such firms should remember that there is now an array of third-party providers, often tech-based, such as ourselves at SteelEye, which can help them, by offering, as we do, for instance, one comprehensive cloud-based solution to firms’ MiFID II and broader regulatory compliance needs.
Also, firms should remember that, while MiFID II certainly presents some challenges, it also presents opportunities and it should be viewed as not just being a burden but as potentially providing benefits too. The task of becoming compliant with MiFID II can bring significant advantages to firms, including risk reduction, enhanced communications and greater data transparency. Firms can leverage the information they generate for MiFID II compliance to gain business insights, develop more relevant content through better sales and marketing and optimise their business. Our essential advice to firms with regard to MiFID II is: don’t just comply, compete.”