Eight out of nine investment management firms attending a recent forum run by investment management consultancy Investit said they did not have a separate MiFID budget and are incorporating MiFID into existing business projects.
For many of the nine firms, a single programme manager is their only resource dedicated to MiFID. It is for this reason that many investment managers are finding it hard to estimate the true cost of MiFID. An FSA paper entitled ‘The overall impact of MiFID’, published in November, estimates that the total cost of MiFID could be as much as ?1 billion, while the benefits derived from it could be around ?200 million per year.
Attending the forum were 25 representatives of nine investment management firms, one asset servicing company and the Institute of Management Accountants (IMA).
Investit is now writing best execution policies for a number of firms and conducting its first MiFID programme across both the asset management and asset servicing businesses of Northern Trust. Clients of Investit’s MiFID Toolkit said the MiFID projects requiring the most amount of work are client categorisation, transaction cost analysis and best execution.
“While the impact of MiFID on our business will vary from most investment firms, custody firms of similar size and scale will have similar issues,” says Friedrich Burian, head of risk management, Northern Trust. “We consider MiFID to be the most important regulatory change in the last decade in Europe and we take its impact on our clients and our business very seriously,” he adds.