The new investor protection framework under MiFID II will have a significant impact on the data flows between manufacturers, distributors, and the end-investor. Here, we highlight the challenges faced by firms as they work to comply with these new requirements and discuss potential ways forward for the industry at large.
Coming into force on 3rd January 2018, MiFID II introduces several new investor protection elements. These include fresh requirements on product governance, the extension of the current MiFID rules to structured deposits, and the strengthening of requirements in areas such as reporting to clients.
Despite the short timeframe, many manufacturers and distributors are still striving to comply with these rules. Live polling results from a recent webinar featuring experts from Silverfinch, PIMFA, and ICE Data Services, indicate that 39% of firms are not even halfway on their journey towards readiness. A further 11% say they are categorically “not ready” for MiFID investor protection measures. The reasons for this vary between firms, and between manufacturers and distributors, yet some common challenges are emerging:
The age of the utility
Data vendors also have an important role to play in this industry discussion. After all, as much as distributors can connect directly to each manufacturer for data exchange, attempting to do so on a large scale, will not only be extremely complex, but it will also be unachievable before the 3rd January deadline. Likewise, manufacturers looking to communicate target market data to a large number of distributors, will face significant inefficiencies without data aggregation exchanges.
ICE Data Services is in discussion with Silverfinch to offer one such data utility. It enables manufacturers to deliver their EMT content to a single location, and from this, the data, aggregated with other Manufacturers’ EMT content, is securely and efficiently delivered to the distribution network. For distributors, access to the Utility via ICE Data services ensures that distributors have all the information they need to meet their MiFID II requirements via a single interface, whilst also facilitating the return delivery of sales suitability reporting to the manufacturer.
In short, the solution supports permissioned and secure exchange of data end-to-end – delivering efficiency benefits for both manufacturers and distributors through a significantly simplified workflow.
To find out more about how we are helping our clients to become MiFID II compliant, visit www.theice.com/mifid-ii