The clock is ticking for finance companies in the Europe. In November the Markets in Financial Instruments Directive (MiFID) will go into effect. The new regulation would require investment firms to find and execute public trades at the best price, publish complete information related to the trade, and show clients that the best possible price was obtained for them. The information captured needs to document the firm found the optimal mix of trade price, cost, speed and likelihood of execution. The goal of MiFID is to make investment service processes uniform across the EU, to promote greater competition among EU member nations, and to guard against fraud and abuse.
In the US, it took five years for the federal government to finally provide a nonambiguous level of guidance around Sarbanes-Oxley. It looks like the early life of MiFID could be significantly more confusing than Sarbanes-Oxley ever was. To date only five EU countries have adopted MiFID as part of their national law which means that guidance around the rules is very limited. A ComputerWorld report found that in the UK 46% of companies thought that the legislation too ambiguous to know exactly what is required of them.
Compliance with MiFID will require an easily auditable system that can manage all documents and records relevant for any trade, and the types of information could include email, faxes, and phone messages. More than half of the companies in the UK feel unprepared for the new requirements. Half of the companies, maybe the same, said that they felt that they weren’t up to the job of being able to keep records for the transactions.
Being able to address compliance regulations like MiFID requires a sound approach to records management. Done right, an RM system can be tailored to meet the demands of specific regulations. The first step though is to get a handle on records management.
