Six out of 10 finance firms set to miss Mifid dealine
UK institutions slightly ahead of the European average
Six out of 10 European financial institutions are expected to miss the November deadline for compliance with the EU Markets in Financial Instruments Directive (Mifid), a survey has shown.
Finance houses in the UK are better prepared than the EU average, but more than a quarter are still unlikely to hit the deadline, the survey off 100 financial institutions by business process management firm HandySoft Global found.
The research, which also included interviews with a sample of corporate lawyers, found that only a third of European firms and just over half of UK firms had appointed a dedicated Mifid compliance officer – a finding that suggests little progress has been made since April 2006 when a KPMG survey put the figure at 29%.
Of the financial institutions surveyed, 23% said there was “a fair amount of overlap” between their Mifid implementations and other compliance tasks, while another 9% said there was “a great deal of overlap”.
But more than two-thirds said Mifid implementations offered only “a little” overlap, with technology or benefits that could contribute to meeting other compliance requirements.
Wendy Cohen, HandySoft’s EMEA sales and operations director said: "These research findings corroborate our recent experience of European organisations' Mifid compliance efforts. Many compliance preparations are indeed behind schedule but it is not advisable to play a waiting game, as non-compliant firms could potentially lose business and attract regulator-imposed penalties, from fines to suspension of trading.”
But financial institutions had “most to fear” from reputational damage, she said.
Cohen added: "The IT implementation that supports Mifid compliance has become an increasingly major element of an investment company's competitive differentiation.”