MiFID II – Data is the Backbone

Access to reliable, accurate and timely data will help ensure the successful implementation of best execution policies. Knowing what to ask of your data to interrogate and analyse execution processes correctly will be critical.

The core objective of MiFID II is to improve the efficiency and integrity of European capital markets. Covering all types of trading, across all manner of financial services anywhere in the European Union, MiFID II’s final regulatory impact will reverberate far beyond Europe’s borders. From brokers and asset managers to custodians and third-party data providers, the far-reaching requirements will fundamentally re-engineer market infrastructure.

For all aspects of a trade, from initiation and client facilitation to final settlement, the need to accumulate, assimilate and evaluate data will be multi-dimensional, cross-asset and cross-regional. Buy side or sell side, large or small, confidence in meeting MiFID II’s requirements will hinge on access to reliable and accurate data.

The announcement that the implementation of MiFID II would be delayed to enable ESMA sufficient time to implement its data infrastructure highlights the extent to which regulators intend to rely on the provision of accurate and reliable data to govern the markets. Trading and execution venues, the members who use them, and the NCA’s responsible for monitoring them will need to provide and use data more effectively to deliver a more transparent, robust and efficient market.

Successfully managing the increasing volume and complexity of data across individual firms and industry-wide will require wholesale changes to policies and procedures, as well as greater harmonisation of standards. From operating conditions to organisational and reporting requirements, every investment firm and relevant service provider will be impacted across multiple business lines.

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