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MiFID II

MiFID II: What you need to know before 3 January

John Mason

06 Dec 2017

MiFID-II-What-you-need-to-know-before-3-January Companies are working hard to prepare for the arrival of MiFID II on 3 January
Companies are working hard to prepare for the arrival of MiFID II on 3 January. Photography: Leonhard Foeger

With the MiFID II compliance deadline less than a month away, are financial institutions ready? We look at potential outstanding issues and how regulators might respond after 3 January.

A quick review of the market suggests the majority of firms within the scope of MiFID II will be ready.

However, many will only just make the deadline, and most are already looking at how to improve MiFID II compliance processes through 2018 and, perhaps, beyond.

Find out how to meet your MiFID II obligations with Thomson Reuters

In the short terms, the focus is on ensuring they have the reference data required for transaction and trade reporting MiFID-II-What-you-need-to-know-before-3-January

In the short term, the focus for many firms is on ensuring they have the reference data required for transaction and trade reporting. This is a fundamental element of MiFID II that will be scrutinized by regulators.

But it cannot be put to the ultimate test until the regulation goes live and data flows from Approved Publication Arrangements, the Derivatives Service Bureau, ESMA’s Financial Instruments Reference Data System, and Approved Reporting Mechanisms.

Watch video — MiFID II Market Readiness Report – Will the market be ready?

MiFID II uncertainty

Also coming late to the party are some trading venues, particularly recently established multilateral trading facilities (MTFs) and organized trading facilities (OTFs) that are completing their own compliance.

Navigate the challenges of MiFID II compliance. Find the answers in our MiFID II market readiness report MiFID-II-What-you-need-to-know-before-3-January
Navigate the challenges of MiFID II compliance. Find the answers in our MiFID II market readiness report

The late arrival of these venues means complete datasets for MiFID II compliance may not be available on 3 January, leaving firms to continue onboarding venues and data as soon as they become operational.

Watch video — How can you turn MiFID II compliance from challenge to opportunity?

The MiFID II mandate on the use of Legal Entity Identifiers (LEI) to identify clients, counterparties and issuers, and the industry mantra of No LEI, No Trade, also remain a challenge for many firms, although solutions such as Thomson Reuters LEI Profiling Service can ease the burden.

Learn what exactly MiFID II is and why it is so important

Competitive advantage

With so much at stake, regulators recognize the MiFID II response won’t be perfect at go-live and are expected to take a proportionate and pragmatic view of compliance in the first few months of next year.

Firms with ongoing compliance programs and sound plans for implementation should find favor. Less so, firms with no, or inadequate, plans.

While compliance complications will spill over into 2018, there is no doubt that most firms making the final sprint to the MiFID II deadline will cross the finishing line.

Find out how  Thomson Reuters Elektron Data Platform delivers the data you need to make smarter trading and investment decisions

Many of these firms are also beginning to consider a long-term course that will help them take advantage of the regulation’s changes to market structure, operational models and behavior in Europe’s capital markets.

MiFID II Solutions from Thomson Reuters MiFID-II-What-you-need-to-know-before-3-January

Regulation in 2018: What’s your compliance approach? MiFID II: What makes our FX trading platform an MTF? MiFID II: European rules, global repercussions Regulatory reform is no barrier for Asia firms MiFID II countdown: Will markets be ready? Filling in the LEI gaps for MiFID II advantage Collaboration and the power of an open platform How can RegTech ease the risk management burden? What corporate treasurers need to know about MiFID II Can finance firms bridge the MiFID II knowledge gap?