Regulator and industry must work to reduce data overload for investors 

22 January 2020

Impediment to MiFID II achieving objectives

According to Linda Gibson, head of regulatory change and compliance risk, Pershing, without timely feedback on the quality of these reports MiFID II will not meet its key objectives.

She says: “It is instead creating more work and expense for firms to correct when it goes wrong. MiFID III should set a more open dialogue between industry and regulators so that firms have a clearer idea of what good looks like.”

MiFID II was to date one of the most complex pieces of regulatory change implemented in the investment industry, according to Gibson, but despite calls for a staggered approach, it was a “big bang” moment that has resulted in firms still grappling with the after effects.

She adds: “Looking ahead, we will instead see gradual implementation of several refinements required to enhance MiFID II’s effectiveness. The three key pillars of “MiFID III” for investor protection will be product intervention, disclosure of inducements and costs and charges – there is recognition that investors still struggle to understand the impact they have on their investments.

“As we prepare for further regulatory change, it’s important that firms engage in the calls for evidence and any consultation on MiFID II reviews – either directly or via industry associations. There is an opportunity to feedback on what hasn’t worked and ensure the creases are ironed out ahead of the next round of regulatory change.”

 

Professional Paraplanner