The survey results, taken from the third in a quarterly series of polls undertaken by SunGard and TradeTech, reinforce those of an earlier poll in which over 65% of respondents admitted that they were yet to even identify or plan operational budgets to meet the demands of the directive.
With only three European countries meeting the January 31st deadline for transposition of MiFID regulations to local law, 63% of those surveyed believed that, even if other EU countries failed to meet the November deadline, those countries that were on track should not delay their own implementations. This response comes despite respondentsâ concerns that MiFID-ready countries may be placed at a competitive disadvantage to those falling behind. Forty six percent of those surveyed also stated that they remained concerned that their own national regulators would add further complexity to MiFID through the imposition of national laws and additional guidance.
Carl James, head of Portfolio Services for Henderson Global Investors Ltd, said, âThere is a feeling from some people within the UK that there are some countries that probably will not be ready by November and maybe they are thinking to themselves âthat it doesnât apply to usâ. I am sure it will eventually but perhaps after the November 2007 deadline.â
Recordkeeping is an area of concern within MiFID. Over 65% of respondents indicated that they would either struggle to handle the new requirements proposed by the CESR (Committee of European Securities Regulators), or that they were unable as yet to ascertain the impact of these proposals.
The survey results are now beginning to show an increased level of consistency in the industryâs attitudes, implying that at least understanding of MiFID and its impact is solidifying. Once again, exchanges were generally agreed by over half the respondents as being most likely to suffer from MiFID in the next ten years; and Best Execution for equities remains one of the biggest challenges for firms â only 23% of firms believe they will know how to ensure Best Execution by the end of April, with most (62%) estimating an August/September timeline. Over 70% of firms expect to use âpost-trade statistical analysisâ to ensure best execution, with over 45% expecting to do pre-trade analysis and more than 40% to use manual reviews.
Richard Thornton, head of MiFID consulting at SunGard Consulting Services, noted: âMany buy-side firms are now expecting to opt down to professional status, with the impact that many will become Systematic Internalisers. Of those surveyed, 25% of buy-side firms now believe they will become Systematic Internalisers within the next five years â a significant increase from 6 months ago.â
Since its launch in September 2006, over 400 participants from global investment banks, institutional and private asset managers, consultancies and exchanges from across Europe, the US and Asia have responded to the SunGard-TradeTech MiFID readiness survey.