REGULATION

Majority of buy-side firms at risk of missing MiFID II deadline

Buy-side study found almost half of firms are attempting to implement MiFID II with a team of just five people and a budget of less than £2 million.

By Hayley McDowell hayley.mcdowell@strategic-i.com June 29, 2017 9:56 AM GMT

Despite the deadline being mere months away, a significant 90% of asset managers have stated they are either at high or medium risk of non-compliance with MiFID II.

Regulatory consultancy JWG’s latest study found a large amount of the industry is underprepared and overstretched in terms of preparation for the January 2018 deadline.

It found 45% of asset managers surveyed have yet to determine how the regulation and obligations affect their firm.

Almost half of buy-side firms surveyed said they are attempting to implement MiFID II with a team of less than five people and a budget of less than £2 million.

Other financial institutions averaged MiFID II implementation team sizes of between 21 and 49 people, with just 15% of firms working with a budget of more than £10 million.

“With small teams and a DIY approach it would appear many are missing the benefit of collaborative efforts and third party solutions,” said PJ Di Giammarino, CEO of JWG.

In terms of implementation, a quarter of firms surveyed stated reporting is by far the most outsourced of their MiFID II requirements.

A handful of asset managers have outsourced their regulatory change management entirely, but the majority have kept issues like research, trading and client management in-house.

Giammarino concluded: “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.”