Results from a study of IT managers and decision makers and risk & compliance managers within UK financial services businesses, reveal there is significant confusion about the impact Brexit will have on MiFID II compliance.
First introduced by the EU in response to the 2008 financial crisis, MiFID II is a set of reforms for the financial industry designed to prevent history from repeating itself in the same way again.
The legislation is due to come into force in January 2018 and will place stringent requirements on call recording, transparency and disclosure in financial services.
With less than six months to go before the legislation comes into force, the study shows awareness about the impact of Brexit on MiFID II, one of the most significant updates to regulatory legislation in the European financial sector, is patchy, at best.
The survey found that 25% of those surveyed believed that leaving the EU will mean that their organisation will be exempt from MiFID II compliance – 70% of this group work in large enterprises with 100,000 plus employees.
A small number – 14% – stated they have no idea how Brexit impacts their requirement for compliance, while almost a quarter of those surveyed (22%) said that, although they feel they understand MiFID II legislation, they are not sure how it applies to their organisation.
Tom Harwood, CPO and Co-Founder at Aeriandi, said: “Firms must realise MiFID II is no longer a distant dot on the horizon. Its 3 January 2018 deadline is now rapidly approaching and will have far-reaching implications for any firm dealing and processing financial instruments.”
“Compliance and IT teams will need to work together and determine whether they have adequate systems in place to implement the required processes and procedures for MiFID II compliance. Many organisations will need to procure and roll out a new set of tools or risk significant financial penalties.”
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