MiFID II – Challenges for Investment Managers26 April 2017Understandably, we’ve seen lots of focus on the big headline MiFID II topics like transaction reporting, best execution, aggregation of costs and charges and product governance. But we reckon it’s time to focus on some of the other elements that haven’t grabbed so many headlines, but that are nevertheless posing challenges for the firms we’ve recently been supporting with MiFID II implementation. Read more »
Clients are drastically scaling up their MiFID II implementation projects as the 3 January 2018 deadline looms. We’re currently helping a wide range of different firms through various types of implementation support projects.
Preparing our clients using gap analysis planning
We have a proprietary tool which covers every element of MiFID II and the published supplementary rules, which we’ve used to assess exactly which requirements are relevant to our clients. Using this assessment we deliver an action plan identifying all of the requirements that’ll impose changes, a description of the agreed actions/next steps, who is responsible for taking them forward within the firm, together with an estimate of how much resource is required and how serious the impact will be on the firm’s business.
A full gap analysis exercise involves the following:
We provide our clients with a short questionnaire about the scope and nature of their MiFID-related activities – using the answers to screen out requirements which will have no effect on their business. Then we produce a schedule of the gap analysis workshops that are needed, including which functions/stakeholders need to be represented at each session.
Workshops are held over a period of days at client offices with those responsible for specific functions attending their assigned sessions. We typically have at least two attendees from Bovill present: one of our Associates is there to record the actions, and one or two Consultants will facilitate the discussion and act as subject matter experts (SME).
After the last of the workshops we deliver a completed gap analysis and action plan, including an indication of how much resource will be required, and the people who’ll need to be involved in the implementation process.
Providing implementation support
Once the gap analysis is done, we’ve found that most of our clients are dividing their implementation projects into a number of work streams – typically between 8 and 12 work streams depending on the size/complexity of the firm and the extent of their MiFID activities.
And we’re finding that our clients are asking for us to support them in a number of different ways:
Validating their existing gap analysis
Where clients have carried out their own gap analysis exercise, or perhaps used another external provider, we are often asked to use our experience of working with similar firms to review the output. This is to check for anything significant that might have been missed, or any impacts they may have underestimated, or areas where views have been taken that conflict with our understanding, or the steps being taken by their peers.
SME support to answer tricky queries and validate proposed solutions
We’re providing our clients with ongoing regulatory and compliance advice in relation to the project implementation plan, as and when they need it. This can be over the telephone, in writing, during meetings and on-site as required. For many of our clients, during their regular MiFID II workstream meetings, regulatory queries will arise that they need our advice on. We channel the clients’ queries and other support requests through one central contact point to co-ordinate the response at our end. Similarly, some clients have reached the stage where they’re starting to ask us to review and comment on their proposed solutions to plug their MiFID II gaps.
Policies, procedures and compliance monitoring programme
Many of the MiFID II requirements require re-vamped policies, procedures and compliance monitoring arrangements, and we are expecting many of our clients will be asking us for support with this as the deadline approaches over the next few months – either with drafting new material ourselves or with validating what the firm has drafted itself is up to scratch.
Not only do our clients have access to Bovill’s pool of MiFID II experts to provide SME support, we’ve also been providing project management resource to coordinate and execute the delivery of MiFID II implementation. This has involved performing all central planning tasks and assisting business line functions with their tasks, as well as producing the analysis which will facilitate new solutions being put in place.
Business Analyst support
We can also provide onsite BA support, either from our own resources or trusted external resources, in order to help the project manager and MiFID II workstream leads throughout the implementation programme. In the later stages of the programme, we can then get involved with establishing the new operational processes and technology.