Are you ready for the MIFID II compliance deadline?

MIFID II compliance deadline is approaching! Is your Forex broker implementing the right changes in accordance with CFDs and Forex Brokers Passporting provisions under MiFID?

30 June, AtoZForex JWG Group Ltd is a trusted financial service industry expert company, they specialize in regulatory change management. Their recent research in relation to the MiFID II revealed that most of the UK financial firms are not ready for the upcoming regulations.

Are you ready for the MIFID II compliance deadline?

The JWG research results state that 90% of buy-side firms are feeling at risk of not being MiFID II compliant by January 2018. European Securities and Markets Authority (ESMA) has set the deadline for compliance on the 3rd January 2018.

In fact, the deadline is delayed by a year, while the previous deadline was set for January 2017. Despite this, many of the firms are still not ready for the regulations.

At the moment, there are only 6 months left until the MIFID II compliance deadline. Industry experts believe that it is important that firms need to fully understand the requirements of the regulation. Moreover, they need to perceive MiFID II compliance deadline seriously. Otherwise, many of incompliant firms may face penalties.

Moreover, about one-third reported having less than £1 billion of assets under management (AUM). Another 1/3 of firms has between £5 billion and £50 billion AUM. The remaining one-third has between £50 billion and £500 billion AUM.

Research reveals MiFID II budgeting

According to the data from the research findings, almost half of buy-side firms irrespective of size implement regulations on a budget of less than £2 million. While 45% of these firms attempt to implement MiFID II with a help of fewer than 5 people.

Meanwhile, some of other financial institutions have reported team sized of between 21- and 49, with 15% of respondents having a budget over £10 million. Only a third of firms stated that they are actively looking to benefit from MiFID II.

JWG has classified respondents as per the three key MiFID II profiles, based on their readiness for MIFID II compliance deadline:

  • The first group comprised firms that are fully aware of the requirements and are making good progress for MiFID II implementation.
  • The second group of firms included those, who have a minimum compliance perspective. This implies that they are not fully aware of the requirements.
  • The third group is at the highest risk of not being compliant with MIFID II compliance deadline. These firms do not understand the requirements and they have not resourced an implementation program.

Small teams and a DIY approach is not a solution

PJ Di Giammarino, CEO of JWG, has commented on the results of the research:

“With only a few thousand hours to implementation, it is very troubling that the buy-side does not see itself compliant with MiFID II. With small teams and a DIY approach, it would appear many are missing the benefit of collaborative efforts and third party solutions.

A common view of the 1.4 million paragraphs of MiFID II is critical for firms on the buy-side to avoid harsh penalties from the regulator and lose out to their competition next year.”

In addition, 10% of respondents that said they were at low-risk group, also was having the smallest budget for implementing the MiFID II regulations. 45% of respondents stated that they did not determine how exactly the requirements affect their business.

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