“ Data is not the only challenge . Best execution , particularly in fixed income , is also a challenge . It will be difficult to track the steps taken to prove your firm attempted to achieve best execution .
“ In future , execution desks and compliance departments will need those facts at their fingertips to satisfy regulators .”
BEYOND BARRIERS Carl James , global head of fixed income at Pictet Asset Management , acknowledges that data is a key regulatory change under MiFID II , stating that data is going to play a “ crucial role in understanding ” firms ’ trading strategies . criteria subject to customer demand ,” she said .
“ Asset class alone could dramatically increase the number of products to be offered by exchanges . Splitting out all these data packages , and the resultant administrative overhead , will likely increase costs rather than reduce them .”
Implementing new systems will play a big role in ensuring firms are compliant with MiFID II . Alpha FMC ’ s Fienberg stressed the importance of effectivelydeployed technology solutions .
“[ They ] will be critical in adhering to the major provisions of MiFID II , whether through onerous new requirements to assure best execution , data-heavy reporting provisions which require efficient data capture and management
SPLITTING OUT ALL THESE DATA PACKAGES , AND THE RESULTANT ADMINISTRATIVE OVERHEAD , WILL LIKELY INCREASE COSTS RATHER THAN REDUCE THEM .
ANNE PLESTED , HEAD , REGULATION CHANGE PROGRAMME , FIDESSA income platform intermediary Axe Trading Dinos Daborn .
He explains : “ The amount of data required and extra information required pre and post-trade under MiFID II is a massive headache for firms .
“ Data and the ability to report the information is one of the reasons behind the delay .”
Daborn ’ s colleague , Mark Watters , says : “ There ’ s between 50 and 65 new pieces of pre-trade information required when MiFID II comes into play . Firms need to know where the
He explains : “ We ’ ve seen this with the equities market and I expect we will see it again in the fixed income market . It ’ s a big component and behavioural and technological changes will follow .”
Earlier this month , Anne Plested , who heads up Fidessa ’ s regulation change programme , wrote in a blog that regulation could perhaps increase data costs for asset managers .
“… ESMA goes several steps beyond pre- and post-trade data unbundling , including separation by asset class , by instrument , by sector and other solutions , or workflow tools that monitor and enforce tighter operational procedures .
“ All of the major software vendors are continuing to make significant MiFID II-related investment in their products during the course of 2016 , which we expect asset managers are already fully aware of ; and asset managers should already have a well-formed plan – subject to further technical specifications – around the platform enhancements required for MiFID compliance over the course of 2016 and 2017 .” l
www . thetradenews . com THE TRADE MiFID II HANDBOOK | 59