The Markets in Financial Instruments Directive (MiFID)

The UK’s financial services institutions may be suffering compliance fatigue but ignoring what is arguably the biggest shake up in European banking for a generation would be an extremely high risk strategy. The penalties are not just punitive fines and negative publicity; in the worst case scenario, organisations could be forced to cease trading.

After nearly a decade of extensive investment in compliance led technology solutions to address Basle II, Sarbanes-Oxley and the Data Protection Act, it is perhaps little surprise that many UK financial services companies have yet to wholeheartedly embrace the demands of the Markets in Financial Instruments Directive (MiFID).

When MiFID comes into force in November 2007, it will enable the option for organisations to offer financial products across all 25 EU member states. Whilst an admirable objective is to create a single market in Europe with increased market transparency, increased investor protection and increased competition and efficiency, achieving that goal will require a significant investment by the industry. Indeed, according to the Financial Services Authority (FSA), organisations in the UK will have to invest up to an estimated £1 billion to achieve MiFID compliance.