With the implementation of the new Markets in Financial Instruments Directive (MiFID II), regulatory compliance is top of the agenda for financial firms around the world.
Regulatory compliance for modern markets
MiFID II, implemented by the European Securities and Markets Authority (ESMA), is designed to make financial markets more efficient and resilient. It focuses on improving transactional transparency, strengthening the protection of investors and preventing market abuse from occurring.
With around 30,000 pages of rules, the implementation of this new regulatory framework marks the biggest change to financial markets in a decade. While technically a European piece of legislation, MiFID II has fundamentally altered financial institutions around the world.
The biggest changes of MiFID II
In MiFID II, ESMA introduced several new requirements and reinforced existing ones to meet market requirements. Some of the biggest changes include:
- New rules on research and inducements
- New and extended requirements for transparency
- An increase in required fields for transaction reporting
- An increase in requirements around data storage
What action is required?
The updated measures in MiFID II represent a major shift in the day-to-day practices of financial firms, with a greater focus on fintech.
To achieve regulatory compliance, a firm’s systems, organisational processes and tools will all need to meet strict new standards. It is particularly important that firms use fintech software that is specifically designed to meet the latest regulatory requirements.
Two of the most pressing issues are transactional reporting and data storage. The updates to transaction reporting will help regulators detect and prevent market abuse, offering increased protection to the client behind the transaction and anyone working on behalf of the client putting. But, to do this, regulators need a greater amount of detailed and accurate data from firms. Firms will also be required to store this data for a period of minimum five years – a significant increase from the current MiFID stipulation of six months.
These changes put pressure on firms with old, legacy systems that may not be able to handle the time-sensitive nature of regulatory reporting or the volume of data demanded.
eflow: Solve the problem of regulatory compliance
Global regulation in the Capital Markets has and will continue to evolve further as policy makers and regulators look to make the markets safer and more efficient. eflow remains at the forefront of the evolving regulatory landscape, with its proven framework for regulatory compliance.
eflow solutions are fully compliant with the latest MiFID regulations, as well as the requirements set out in the Market Abuse Directive (MAD). We focus on systems that are simple and easy to use, with the option of applying bespoke settings or reporting measures that best fit your firm’s requirements.
By combining middleware, workflow, business decision rules, aggregation, case management and an embedded toolkit, eflow regulatory systems can be quickly configured and deployed.
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