Implementing MiFID II has been forecast to cost the financial industry a total of $2.1 billion in 2017, according to a recent report.
The report – published and authored by IHS Markit and consultancy firm Expand – revealed the top 40 global investment banks and the top 400 global asset management companies are expected to both spend in excess of $1 billion to adopt systems and processes for MiFID II compliance.
It also explained that over half of the MiFID II budgets at investment banks are being dedicated to improving trade reporting and transparency, whereas best execution rules have led to buy-side budgets targeting investor protection.
Global head of trading services at IHS Markit, Michael Aldridge, explained the research was carried out to help firms benchmark their plans “to a transparent industry standard.”
He said that research on the size of investment plans across banks and buy-side firms allows comparisons of plans and preparation.
Managing partner at Expand, Raza Hussain, added that across the industry, firms will be determined “to ensure they do not fall behind the preparation curve.”
Hussain concluded: “MiFID II compliance remains at the top of the industry’s agenda.”