Six months remain. January is looming. It seems as if there is some anxiety building up about the impact of MiFID II and the compliance deadline.
The Markets in Financial Instruments Directive II or MiFID II is the biggest regulatory shake up of European financial markets in at least a decade. Its aim is to enable greater transparency and protection for customers across a range of asset classes and its financial instruments.
The time left to comply is not the only reason investors and firms alike are showing some signs of anxiety. In part, some of this anxiety emanates from the regulators themselves. The sense is that there needs to be further clarity on the scope and greater level of detail for meaningful guidance.
A study by JWG found that 90% of institutional investors in Europe risk non-compliance, are under-prepared and over-stretched in efforts to comply with nearly 1.5 million paragraphs of rules.
Whether more time will be granted beyond the one year delay will be interesting. The reality is that probably one third of the rules are yet to formalised or the provision of technical guidance for their implementation.
However, most firms or investors affected by the regulation will wish not to take the chance to miss compliance. Getting locked out of particular markets they operate in or face significant penalties would not be a great start to the new year.