MiFID will allow investment firms, banks and exchanges to
provide their services across borders on the basis of their home
country authorisation, and will change the conduct of business
rules applicable to financial institutions. It is due to be
implemented in the UK by 30th April 2007.
The Directive is likely to have a major impact on current market
and trading practice as well as upon the way in which the financial
service sector is regulated. It will also require firms to
introduce a whole series of changes to their systems, documentation
and order-handling procedures.
Industry groups the Association of Private Client Investment
Managers and Stockbrokers (APCIMS), the British Bankers'
Association (BBA), the Futures and Options Association (FOA) and
the International Capital Market Association (ICMA) are therefore
concerned that the implementation be carried out in a practical and
cost efficient way. They are also keen to avoid high levels of
legal uncertainty and regulatory risk.
The Associations have therefore launched a five-stage programme
of work for establishing an industry approach towards implementing
the Directive. This includes:
- Developing a set of industry guidelines to assist firms in
areas of MiFID implementation that carry a high degree of legal
risk and/or legal uncertainty.
- Producing specimen industry documentation necessary to comply
with the new MiFID requirements.
- Providing, through 2006, a series of implementation courses and
individual specialist workshops on the practical problems and
issues surrounding implementation of MiFID.
- Publishing a two-part "Survival Guide", the first part of which
(to be issued in the first quarter of 2006) will comprise a
timetable and strategy for firms to manage progressively a
programme of implementation. The second part (to be issued in the
last quarter of 2006) will comprise a "tick box" checklist covering
all the changes that firms will be expected to introduce by the
final agreed date of implementation.
- Issuing, through 2006, periodic releases and updates covering
timelines and regulatory progress towards finalising the new
requirements.
A steering committee is being set up to ensure that the work is
as practical and market-sensitive as possible.
