The long-awaited deadline may have arrived, but according to Uner Nabi, wealth and asset management Mifid II lead at EY, while most asset management firms are likely to satisfy the FCA with their level of compliance, it could still take them most of 2018 to fully conform.
He says: “Firms may be keen to refocus resource on other priorities as soon as possible, but work on Mifid II will have to continue with adequate resourcing for around six months into 2018 to complete implementation, correct any inaccuracies and move from tactical solutions to more efficient and effective long-term strategic solutions.”
According to Nabi, much of the effort so far has been on getting compliant rather than thinking strategically about the operating model, products and distribution in the new environment.
“Mifid II is creating a new regulatory environment and new dynamics,” he adds. “To thrive firms will need to respond appropriately.”
Andrew Glessing, head of regulation at asset management consultancy Alpha FMC, also believes asset managers will have more on their plate in the first half of the year than most imagined, as concerns remain over the challenges presented by Mifid II and how the regulator will assess implementation.
He says: “Many are understandably nervous about the operational risks associated with the trade and transparency reporting under this new regulation, so oversight, testing and remediation will become the order of the day, as firms look to get beyond essential requirements of Mifid and develop best practice.”
Progress
Asset management firms do appear to be making strides when it comes to compliance. Smith and Williamson, for example, recently published a note detailing how it is liaising with all platforms regarding its managed portfolio service to comply with the regulation.
Steps taken include arranging to have transmission agreements in place with all platforms by 3 January, requesting a copy of each platform’s best execution policy, providing platforms with any supporting information regarding its own charges, and working with the platforms to ensure they notify advisers should any of their clients’ portfolios fall by 10% or more.
Article continues on the next page…
