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Global Reach of MiFID II Strikes North American Buy-Side

Recent SimCorp poll reveals concerns and challenges faced by the North American buy-side, as the deadline nears

SimCorp, a leading provider of investment management solutions and services to the global financial services industry, today announced poll results from the North American buy-side on the operational impact of MIFID II. The poll focused on the directive’s reach beyond the European Union. More than 150 buy-side participants from across 68 firms were surveyed in conjunction with the webinar, “The Move Towards MiFID II: Ensuring Compliance for the North American Buy Side,” hosted by SimCorp in September.

Survey Highlights

  • 58% confirmed that they will need to comply with MiFID II. Out of this, only 23% feel extremely confident that they have a plan in place, while 77% are either somewhat or not at all confident.
  • With just 90 days before the deadline, 28% remain unsure if and how their firm will be affected.
  • Respondents cited the following as the top three operational challenges:
    • 56% - Complying with transaction reporting requirements
    • 50% - Understanding the new market structure
    • 45% - Unbundling of research and execution

“MiFID II is one of the biggest pieces of regulation to ever hit the buy-side industry, so I am not surprised by the extent of uncertainty and concern reflected in the research and poll results,” says Gernot Schmidt, Product Manager of MiFID II at SimCorp, and a speaker at  the webinar. “The ability to aggregate data across asset classes, geographies, business lines and underlying applications will be essential. One way to do this is by adopting an IBOR architecture, which provides a golden record for positions and transactions, allowing asset managers to address many of the data requirements for MiFID II in one central application. This holistic approach also benefits the Front Office with better data for trading decisions and taking advantage of new trading venues emerging in the wake of the regulation.”

“It also makes sense that the new transaction reporting requirements rate high on the list of concerns,” Schmidt continues. “Daily detailed transaction reporting will be expanded to a much larger set of instrument types, which will call for data gathered from additional source systems to be aggregated. This aspect of MiFID II also provides a compelling case for systems and data integration and increased automation.”

Also discussed in the webinar, with similar findings to SimCorp’s poll, is the recent report from Tabb Group: ‘Conquering MiFID II and Beyond in North America: Bridging the Great Data Divide’. The report explores new data requirements and challenges around data lineage, how MiFID II is reshaping the front office and how to achieve alignment and consistency across assets and the trade lifecycle.