MiFID II Implementation

 

How to deliver MIFID II compliance – Complex Transformation & Change

MiFID II: Complex transformation follows a lifecycle 

MiFID II requires complex transformation and the various states of compliance readiness firms are in can be categorised as follows: 

Fact finding: Still exploring the regulation text with no firm decisions made 

Assessing impacts: Exploring the wide-impacts on business models and operations 

Planning and mobilising: Scoping and starting a programme of change activity 

Executing and controlling: Delivering and controlling the change 

Embedding and closing: Taking steps to confirm delivery of change outcomes, testing robustness and closing the programme 

MiFID II: Implications for Financial Services firms

Typical impacts of MiFID II for Financial Services firms can be summarised as follows: 

Clients & Products:

• Restructure product offerings / More ‘non-complex’ products

• New product governance requirements

Distribution:

• Increase in distribution channels to serve specific client 
segments

• Direct-2-Client (D2C) & Digital offerings may increase

Markets:

• Increase in Systematic Internalisers & reduction in OTC

• Trading venue changes & impact on fixed income liquidity

• Increase in public data and execution quality

Investment Research:

• Increase in transparency may lead to more specialization

• New governance requirements may lead to rationalisation

Transaction Reporting:

• Changes in reporting delegation either moving in-house and/or outsourcing depending on cost effectiveness

• Increased scope & data requirements

Costs & Pricing:

• Increased costs and reduced margins

Record Keeping & Operating Model:

• Electronic & Telephone taping / surveillance

• Possible use of Transaction Cost analysis (TCA) may lead to limited outsourcing

How to deliver MIFID II Compliance

Typical Challenges per Transformation State

Indicative features of each state are:

Fact Finding:
  • Interpreting the amount and complexity of requirements
  • Securing resources to review and interpret the text
Assessing Impacts:
  • Assessing the impact across the firm
  • Defining the size and scope of change needed
  • Assuring senior management about the quality of impact analysis
Planning and Mobilising:
  • Establishing clear shared programme outcomes
  • Defining delivery accountabilities
  • Creating a change plan to deliver on time
  • Securing budget and resource
Executive and Controlling
  • Securing and maintaining resources
  • Assuring sponsors about the effectiveness of delivery
  • Managing risks and issues, especially on more technical changes
Embedding and Closing
  • Assessing that delivery has been as intended, with outcomes met
  • Completing a post implementation review
  • Managing any residual incomplete or overdue actions

How can we help?

Our Regulatory Consulting & Transformation Management teams consist of highly specialised deep domain regulatory advisory services combined with experienced and proven IT and change management professionals operating across the transformation lifecycle.

We can help in a number of ways, including:

  • Detailed gap analysis of how your business will be affected by the new legislation
  • Project and programme management across the transformation lifecycle
  • Business analysis and requirements definition, inclusive of functional and technical requirements documentation
  • Stakeholder management
  • Location strategy assessments and change management
  • Benefits tracking and realization management
  • Target Operating Model design and implementation
  • Business process optimization, Lean and Six Sigma delivery
  • Migration planning and execution
  • Test strategy definition and management
  • Quality management
  • Post-implementation support
  • Project and programme assurance
  • Third-party assurance