The Markets in Financial Instruments Directive (MiFID)
Key Milestones on the Critical Path for Asset Managers
Hosted by: Ernst & Young's Global Asset Management Center
While asset managers have typically set the wheels of their MiFID programmes in motion, many have not yet engaged with the real business issues such as relations with clients, distributors and brokers, and operational impacts have not been fully mapped out.
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Proposed MiFID inducement rules may significantly affect the way asset managers do business with clients and brokers. At the same time there are significant concerns over implementing the new client classification regime in time and satisfying best execution requirements. And inevitably, the implications of all of these challenges for data and technology infrastructure are immense, ranging from data acquisition issues through to architecture design and testing.
With only 6 months to go, this webcast will focus on current trends in implementation and seek to answer some of the burning questions asset managers and the distributors of asset management products are likely to have around the following topics:
- Distribution - MiFID' s inducement rules require that fee, commission or non-monetary benefits be designed to enhance the quality of the relevant service to the client. There are also proposals that such payments must be proportionate. Inducements, distribution agreements and due diligence are the three key areas of focus for distribution.
- Client Relations - MiFID sets new requirements for classifying clients and providing appropriate levels of consumer protection in client communication, investment advice and portfolio management. Firms will need to change their processes and explain the changes to customers. Some client profitability profiles will change.
- Trading - MiFID requires firms to achieve the best possible result for clients when trading in investments. As trading venues compete for business, there should be opportunities to lower costs and improve execution. Equally the need to respond proactively, clarify service expectations with brokers and for robust audit trail and record keeping to demonstrate success will provide real challenges.
- Project Management and Technology - Many firms have found it difficult to build momentum into their programmes as the policy position remains unclear in some key areas. But the systems and data implications of MiFID are significant. Given IT lead times firms need to make progress now where they can whilst keeping programmes flexible enough to accommodate future change.