MiFID was issued in April 2004, and will affect participants in the financial services industry in all 25 member states of the EU across their activities in almost all asset classes. MiFID aims to create greater market transparency and to ensure “best execution” for investors, whether trading occurs on-exchange or off-exchange. Investment firms, exchanges, trading platforms and market data vendors will all have to adapt their business processes and their IT systems in order to comply with MiFID. This EU Directive is due to be implemented in the national law of all EU member states in early 2007, leaving only two years for market participants to analyse what needs to be done and implement the necessary changes.
The European Commission and the Committee of European Securities Regulators (CESR) are continuing to consult with the financial services industry as a whole in order to define in detail what compliance with MiFID will mean. The industry has also been asked to recommend standards that would help market participants to implement the necessary changes.
FIX Protocol Ltd, ISITC Europe, RDUG and SIIA/FISD today announced the creation of a Joint Working Group whereby the four industry associations will pool their efforts and resources to develop best-practice recommendations, appropriate standards and increased industry awareness to help market participants achieve MiFID compliance. These four industry associations together address all stages of the business processes that are impacted by MiFID. Their members are from all sectors of the financial services industry.
Barry Marshall, Co-Chair of the FIX Protocol Europe Governance Committee, said, “MiFID is the biggest change to affect the European financial services industry since the Investment Services Directive in 1993. It will have a massive impact on all participants in the industry. It is vital that appropriate messaging standards are developed and applied that allow cost-effective MiFID compliance.”
Stuart McKinley, Chairman of ISITC Europe, said, “Industry participants will have to adapt their pre-trade and post-trade business processes to ensure that they meet the requirements of MiFID. By creating a Joint Working Group on MiFID we intend to deliver industry best-practice and standards recommendations that will help market participants across the EU to meet their technology-related MiFID compliance requirements within the legal implementation deadlines.”
Anthony Kirby, Founder of RDUG said, “This industry initiative is both timely and inclusive, and will couple to other industry efforts in Europe, bringing greater focus and commonality as to how market and reference data should be managed in readiness for the rollout of MiFID post-April 2007."
Tom Davin, Director of SIIA/FISD said, “MiFID’s aim of increasing market transparency will change the range and the volume of financial market data that is published across the EU. This will affect all points along the data distribution chain, including exchanges, investment firms, market data vendors and data users. Bringing the industry together in a Joint Working Group to address all of the technology-related aspects of MiFID will help market participants to understand better the changes that they will need to make to their information systems in order to comply with and benefit from MiFID.”
The four industry associations have nominated Chris Pickles, Co-Chair of the FIX Protocol Global Education & Marketing Committee, to act as chairman of the Joint Working Group.
The first meeting of the Joint Working Group on MiFID will take place in early May 2005.
FIX Protocol Ltd is a global standards organisation that manages, develops and maintains industry-driven messaging standards for the financial services industry. Its members include exchanges, banks, brokers, investment managers, market data vendors and application software providers. The FIX (Financial Information eXchange) Protocol is used by thousands of brokers, investment managers and exchanges internationally as a standard means of exchanging pre-trade, trade and post-trade messages.
ISITC (International Securities Association for Institutional Trade Communication) Europe is a working committee of securities operations professionals representing custodian banks, investment managers, brokers, and vendors. The group's mission is to foster alliances and advocate standards that promote straight through processing (STP) of securities transactions. The members of ISITC Europe actively participate in and influence industry-wide initiatives that promote direct electronic processing and information flow among all industry participants, throughout the entire trade life cycle.
RDUG (Reference Data User Group) was founded in 2002. There is growing awareness of the costs, risks and the value associated with market, reference and descriptive data. RDUG is a forum where investment managers, broker/dealers, custodian banks, clearers, market infrastructure providers and industry suppliers can debate the issues and evolve solutions which support improved market practices, better STP and improved operational compliance.
SIIA/FISD (the Financial Information Services Division of the Software and Information Industry Association) is the global forum for the financial information industry. Its members include exchanges, banks, brokers, investment managers, market data vendors and application software providers.
