Luxembourg
22 March 2017
Reporter: Stephanie Palmer
MiFID II challenges abound
Data requirements and target market rules under MiFID II could pose challenges for asset managers and distributors, heard attendees of the ALFI European Asset Management Conference.

Martin Parkes, director of government affairs and public policy at Blackrock, noted that the requirements under MiFID II are one part of a broader set aimed at better product governance from manufacturers, and a drive for them to link with distributors with regards to suitability.

One of the big differences between the first and second iterations of the directive is the “idea of continuity”, Parkes said. “When you have launched a product, you continue to own it.”

Manufacturers must see that a product continues to match “the label you set for it at the start”, and while it may be a challenge to support distributors in meeting the 1 January 2018 compliance deadline, the directive also “poses ongoing obligations”. He added: “MiFID II doesn’t stop in January.”

Andreas Stepnitzka, a senior regulatory policy adviser at the European Fund and Asset Management Association, suggested that the onus on making the target market obligations work is “more on the industry”. He said data is going to shape the industry, going forward, and that there must be interaction with regards to data and standardisation.

The industry is “trying to understand what the standard is”, he said, asking: “What is the right amount of information to fulfil the MiFID requirement?”

Stepnitzka said: “We have to have a discussion with many industry players to come up with one starting point that will be the basis for future developments.”

Parkes added that data itself is “never by itself constitutive of information”.

Asset managers have to be careful when deciding what data they want and in which format, in order to “drive good decision making”.

Following implementation of MiFID II, Parkes said he expects to see firms working with key distributors to better understand more about what happens beyond the intermediary nominee account, to understand client types that are interested in the funds, and how they might react to change.

This could also be useful to help with liquidity risk management in the future, he said, adding: “More detailed, more granular investor-type information could be very valuable.”

More regulation news
The latest news from Asset Servicing Times
Join Our Newsletter

Sign up today and never
miss the latest news or an issue again

Subscribe now
MiFID II unbundling compliance will be last-minute scramble for 85 percent
23 June 2017 | London | Reporter: Stephanie Palmer
Asset managers are cutting it fine in compliance with research unbundling rules under MiFID II, with 85 percent saying they expect to be compliant in Q4 2017 or later, ahead of the January 2018 deadline
ICMA: NSFR will make EU repo less attractive
23 June 2017 | London | Reporter: Drew Nicol
The association also point to increased automation of highly manual and labour-intensive processes of the market as a way to mitigate rising costs and create efficiencies
Broadridge takes on SFTR reporting requirements
20 June 2017 | New York | Reporter: Stephanie Palmer
Broadridge is addressing trade reporting requirements set to come in with the Securities Financing Transaction Regulation, launching a new solution spanning the entire reporting lifecycle
European regulations still causing confusion
14 June 2017 | Berlin | Reporter: Stephanie Palmer
The regulatory environment is breeding change, and complication, for both investors and fund managers, according to panellists at Fund Forum International in Berlin
EC proposes ‘two-tier’ approach to CCP regulation
13 June 2017 | Brussels | Reporter: Mark Dugdale
EU legislators have proposed a massive overhaul of central counterparty supervision
European Commission hands more power to ESMA after CMU review
09 June 2017 | Brussels | Reporter: Stephanie Palmer
The European Commission is to hand the European Securities and Markets Association more powers in order to improve the effectiveness of the Capital Markets Union
US Financial CHOICE Act passes House of Representatives
09 June 2017 | Washington DC | Reporter: Drew Nicol
US President Donald Trump’s efforts to turn back the clock by gutting the bulk of post-crisis regulation took another step forward yesterday, with the House of Representatives passing the Financial CHOICE Act unopposed
More regulation news