With only six months left before Europe introduces the second Markets in Financial Instruments Directive (MiFID II), many in the UK financial services industry are confused about how compliance with the legislation will be affected by Brexit.
The finding comes from compliance software specialist Aeriandi, which commissioned research from Opinion Matters. Their survey was conducted among a sample of 250 professionals working in the UK’s financial sector in companies, which process payment transactions over the phone and have at least 1,000 employees.
The survey sample was split equally between managers with risk/compliance in their job titles and IT decision makers/IT managers. Responses suggest that awareness about the impact of Brexit on MiFID II – one of the most significant updates to regulatory legislation in the European financial sector – is no more than patchy at best.
Among the key findings of the survey:
• One in four said that they believe that leaving the EU will mean that their organisation will be exempt from MiFID II compliance. Of this group, 70% work in large enterprises with 100,000-plus employees.
• Fourteen per cent stated they have no idea how Brexit impacts their requirement for compliance.
• Twenty-two per cent say that, although they feel they understand MiFID II legislation, they are not sure how it applies to their organisation
“Firms must realise MiFID II is no longer a distant dot on the horizon,” comments Tom Harwood, CPO and co-founder at Aeriandi. “Its 3 January 2018 deadline is now rapidly approaching and will have far-reaching implications for any firm dealing and processing financial instruments.
“Compliance and IT teams will need to work together and determine whether they have adequate systems in place to implement the required processes and procedures for MiFID II compliance. Many organisations will need to procure and roll out a new set of tools or risk significant financial penalties.”
First introduced by the EU in response to the 2008 financial crisis, MiFID II is a set of reforms for the financial industry designed to prevent history from repeating itself in the same way again. When the legislation comes into force next January, it will place stringent requirements on call recording, transparency and disclosure in financial services.
According to Chris Michael, chief executive officer (CEO) and co-founder of Swytch, a cloud-based mobile network and dialer app start-up, companies can harness the power of cloud mobile numbers to achieve compliance.
“By covering the entire advice chain, MiFID II extends call recording requirements to more situations, more team members and more devices than ever before,” says Michael. “With personal mobile phone use now prominent in business, this presents a control issue for organisations faced with MiFID II compliance.
“Some insist bring-you-own-device (BYOD) policies will be incompatible with MiFID II, or that compliant company subscriber identity modules (SIMs) will be the only answer. In reality, it’s not the devices or SIMs that need to be company controlled to actively demonstrate compliance, but the business mobile number.
New cloud-based mobile technology allows businesses to provide employees with a work mobile number they can use on their own personal device. It also means businesses using BYOD can guarantee MiFID II compliance by recording business communications taking place on employees’ personal devices.
“Calls made using an employee’s personal number are not recorded, striking the ideal balance between employee privacy rights and MiFID II compliance.”
• For more on the impact of Brexit, click here.
Criticisms of bitcoin by JP Morgan Chase’s boss have been denounced by a UK academic as “ironic” and “hardly surprising” considering the impact bitcoin could have on financial intermediaries.
Leaked documents from the UK Home Office proposing that low-skilled EU migrants would be restricted in the UK’s post-Brexit immigration scheme may be more likely to increase automation and off-shoring of labour, rather than increase British wages, industry experts have warned.
The European Central Bank's (ECB) hotly anticipated meeting on Thursday afternoon made the euro skyrocket, as president Mario Draghi announced interest rates would remain at 0% and its quantitative easing programme will stay until at least the end of 2017.
The “sad truth” of banking is that many jobs will be automated in the future, Deutsche Bank's chief executive said yesterday. Despite this, a recent survey found that 98% of European workers are optimistic about the changes automation will bring to their workplace.