MiFID II / MiFIR - Staying ahead

13 July 2015

It has been over 12 months now since MiFID II (Markets in Financial Instruments Directive) / MiFIR (Markets in Financial Instruments Regulation) were approved by the European Parliament & Council.  The new directive is the largest regulatory change to be implemented in the financial markets, covering high level topics such as Investor Protection, Transparency, Data publications, Micro-structural issues, Trading venues & Commodity Derivatives.

With the new rules to apply from 3rd January 2017, do you know where you should be in the planning and implementation phase?

 Current key dates:

  • July 2015 - Delegated acts approval
  • September 2015 - Technical Standards to be published
  • December 2015 - FCA Consultation Paper to be published
  • 3rd July 2016 - Transposition into domestic laws for the Member States 
  • 3rd January 2017 - New rules apply

Staying ahead

Whilst there are certain aspects of the Directive that are yet to be finalised, there is enough direction in the Level 1 text on commencing your planning and implementation phase.  To stay ahead of the compliance date of January 2017 you should be now taking the initial steps and beyond.

Firstly and crucially you must have senior stakeholder buy in to your project, as the sheer scope and complexity of the changes under MiFID II drastically effects the business in many ways and will ultimately lead to change in the strategy due to the effect in business revenue.  The high level of technological change required and the lead time needed to provide implementation, combined with the enhanced supervision, ensures that the MiFID II programme needs senior executive sponsorship. This awareness and sponsorship should reach board level and is advisable that a board member is a party of the steering committee due to the impact on the business and risk profile.

In your impact analysis on each business area, a further breakdown of the level 1 text (Directive/Regulation articles) is required to assess if there is any further information (RTS etc) to become complete, this will give you a clearer picture in your task at hand.  Your project teams and relating working groups can then delve into the Technical Standards and begin the journey to compliance. 

A worthwhile exercise is a review of your MiFID I implementation to ascertain that  you have a strong footing to deliver MiFID II. It has been common practice across the board that there are still issues with MiFID I which may need attention.

This can then lead into the full gap analysis of your current business practice against the MiFID II future state with the realisation that upon implementation there will be local regional differences which need to be taken into account.  Ensuring flexibility in your planning is paramount as the standards evolve and the business strategy may change depending on the future business model.  All working groups need to have a clear audit trail and decision rationale embedded into the process for future reflection which maybe be needed, especially when liaising with the regulators.

 Best efforts

MiFID II timeline for the new rules to apply is unlikely to change, therefore you should be planning to satisfy this deadline.  In reality the scope and size of the task at hand compounded with the lack of clarity surrounding the technical details and best practice means there is every chance firms will not be fully compliant.

The FCA are likely to be more lenient if you are not compliant due to delays in release of ESMA guidelines but only with the transparency of a focused project effort and governance structure has been constructed.  This is where your audit trail of decision rationale will be invaluable when discussing progress with the regulator.


To assist and ensure our clients are on track, MThree Consulting offer full programme management covering Business, Technology and Operations.  MThree Consulting has significant direct implementation experience of regulatory compliance programmes across the globe. This gives us deep understanding of financial services across the spectrum across all asset classes, from Front Office trading and Post Trade Operations, through to Risk and Finance.

MThree Consulting can ensure you are on track and provide a clear path to compliance. Please contact me for further discussion and assistance.