Business UK

Only 6% of Asset Managers are compliant with Mifid II

Only 6 per cent of asset managers are ready to meet the new best execution analysis standards under Mifid II

The Markets in Financial Instruments Directive II (Mifid II) is one of the most far reaching and demanding pieces of regulation yet for the wealth and investment management industries.

A failure to achieve its product-governance standards could disrupt the sales process for the entire distribution chain. Some experts believe organisations are holding out for Brexit negotiations to come into effect, as they expect some loopholes may appear which they can exploit.

With the deadline for  MiFID II implementation fast approaching (3 January 2018), the Chartered Institute for Securities & Investment (CISI) has noticed an increase in demand from its member firms for additional education on this specialist area, outside of its core CPD programme.

As part of the product governance process, a manufacturer must assess each product and assign it a target market that clearly defines the type of investors the product is aimed at, and the allowable distribution strategies for that product.

Given the array of strategic and operational challenges involved in implementing MiFID II, the CISI is delighted to announce its partnership with Thomson Reuters to host nationwide seminars addressing the key features of MiFID II.

Alex Xavier, CISI Assistant Director, Member Services said: “Thomson Reuters has excellent insight to offer on MiFID II, so we are delighted to partner with them to deliver this nationwide seminar programme. With additional perspectives offered by lawyers, financial practitioners and the regulator, we believe these seminars will provide much needed knowledge at a crucial time for our members” .

Each distributor in the chain, including the end adviser, is in turn obliged to operate their own product governance process and to set out and document their own specific views on the applicable target market and distribution strategy for each of the products in their arsenal.

A recent survey has suggested that only 6 per cent of asset managers are ready to meet the new best execution analysis standards under Mifid II, while 61 per cent need to provide more granular detail to their policies. Mifid II standards must be implemented in January 2018.

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