The Financial Services Authority's delayed timetable for consultations on how it will apply the EU's Markets in Financial Instruments Directive has caused concern among firms and banks that they may not be ready. The delay comes as operational staffers are just starting to take more of a driving role in preparations for the directive.
Last year, senior management and compliance professionals were more focused on MiFID and the political side of the directive. This year, middle management staff, particularly in operations and IT, are getting more involved, said Chris Pickles, chair of the MiFID Joint Working Group. Operations staffers are pushing for more education on MiFID because they need to know how to apply the directive to day to day business processes, he said. As consequence, events and conferences are full and even membership to the MiFID JWG has topped 470 participants, said Pickles.
Two consultations--the main MiFID standards paper and the systems and controls proposal--that were due in March are now slated for the third quarter. A third, on financial promotions, was moved from this month until at least October. David Cliffe, a spokesman at the FSA, said the Authority aims to stick with the compliance deadline. He said the consultation timetable was revised because of the delayed publication of the MiFID implementation measures--known as Level 2--by the European Commission. Robert Finney, partner at law firm Denton Wilde Sapte in London, said this will not give the regulator enough time to take into account the industry feedback. Finney said that firms that do not make reasonable efforts to start work will be in trouble. Laybourn added that the FSA should at least be more flexible and not enforce compliance right away. Catriona Shaw, head of European affairs at Association of Private Client Investment Managers and Stockbrokers, added the FSA should move the date back to help firms.
Investment banks in Europe have been slow in preparing for MiFID and Finney said his observations are that firms still have a lot to prepare. In addition, firms have to wait for the FSA and any other respective home country to tell them how to follow some of MiFID. Parts of MiFID are rules that all EU member states must put in place identically. The standards portion depends on how the home regulator interprets it. The larger firms are more informed and ahead with preparations because they have the resources available to do so, said Pickles. Also, larger players recognize the competitive advantages of the directive and as a result, are keeping their card close to their vests, he said.