Tech Manager at Asset Manager 'Praying' for Mifid II Delay
A technologist at Franklin Templeton Investments voices concerns about regulation.

The Markets in Financial Instruments Directive II (MiFID II) is due to be implemented Jan. 3, 2018, but at least one tech manager at an asset manager with over $733 billion in assets under management is hoping the regulation will be pushed back once again.
Oliver Grimsdall, IT manager at Franklin Templeton Investments, was clear on where he stands on the potential for MiFID II's implementation date getting a second extension.
"I'm praying for it," said Grimsdall, speaking on a trade compliance panel at the North American Buy-Side Technology Summit 2016 in New York.
The topic was initially brought up by moderator Jay Wolstenholme, senior analyst in the securities and investments group at Celent, who asked the group about their biggest regulatory concerns.
Grimsdall said MiFID II was top of mind due to answers and definitions of all requirements not being made available, coupled with a shrinking window to get things done.
"It really is, if you've got rinky-dink systems, you're going to be pushed out," Oliver Grimsdall, Franklin Templeton Investments
What's even more troubling for Grimsdall is the fact the industry doesn't seem to be willing to wait up for those too slow to adapt.
"At some calls I've been on, people have asked, 'What happens if we don't comply? We can't comply quickly enough.' And the sponsors have said, ‘Well, the market won't miss you,'" Grimsdall said. "It really is, if you've got rinky-dink systems, you're going to be pushed out."
Data Is the Difference
Grimsdall said at the very least, a firm needs good data along with integration.
"That's just the entry requirement," he said. "If you haven't got those minimum things, you're toast."
Terry Flynn, front-office specialist and team lead at SimCorp, said that while some believe the regulation has been positioned as an order management system (OMS) requirement, a lot of the data required to be compliant doesn't sit in the OMS. Instead, it's in a variety of locations, meaning the key is having good data that you can get to, according to Flynn.
Flynn echoed Grimsdall's sentiment about answers and definitions for MiFID II not being fully explained. Part of the problem is the breadth of which the regulation is trying to cover, Flynn said. During the panel, MiFID II was called Europe's Dodd–Frank Act, but, as Flynn pointed out, Dodd–Frank only had to cover one marketplace while MiFID II is responsible for about a dozen.
"You look at how they are setting best execution to all these esoteric asset classes where there is no market. There is no pricing. I'm not sure how they are going to do it. Those rules have not been clearly articulated," Flynn said. "How might you do best ex on a swap that's never been priced before? How do you prove that that was the best execution? It was the only execution. It's a difficult scenario."
Waiting Game
Not all panelists were as concerned with MiFID II. Ben Hoffstein, CTO at Pine River Capital Management, a hedge fund with $11 billion in assets under management, said the regulation wasn't currently a top concern for him, although he admitted the current conversation was making him nervous that he was missing something.
Hoffstein said '40 Act regulations in the US and Undertakings for Collective Investment in Transferable Securities (Ucits) in Europe are two more-pressing regulations for the firm. Regulation Automated Trading and the SEC's Tick Size Pilot program are also key concerns, he added.
For Hoffstein, MiFID II is something that simply hasn't come across his plate yet.
"It's still being discussed between our legal team and our trading team to figure out what it all means for us," Hoffstein said. "My role is on the technology side. I guess I'm awaiting further instructions."
The Bottom Line
MiFID II is in need of further explanation of several of its rules as the window to comply with the new regulation gets smaller. For the time being, the two things deemed critically necessary for compliance are good data and integration throughout the firm.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: https://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
The great disappearing internet—and what it could mean for your LLM
AI-generated content, bots, disinfo, ads, and censorship are killing the internet. As more of life continues to happen online, we might consider whether we’re building castles atop a rotting foundation.
AI’s next gig: The rising cost of off-channel communications compliance
As the cost of analyzing communications increases, what tools can firms deploy to save time and money while avoiding penalties?
CAT on life support after appeals court ruling
Ahead of a comprehensive review promised by the SEC, lawyers believe that the recent overturn of the Consolidated Audit Trail’s funding order could herald its demise.
Euroclear readies upgrade to settlement efficiency platform
Euroclear, Taskize, and Meritsoft are working together to deliver real-time insights and resolution capabilities to users settling with any of Euroclear’s CSDs.
Messaging’s chameleon: The changing faces and use cases of ISO 20022
The standard is being enhanced beyond its core payments messaging function to be adopted for new business needs.
TT partners Thoma Bravo, Fitch launches GenAI solution, AI infrastructure woes, and more
The Waters Cooler: EquiLend acquires Trading Apps, Ultumus and BMLL partner for ETF data and analytics, and more in this week’s roundup.
CAT funding plan struck down by US appeals court
The 11th Circuit court ruled that the SEC had not established a sufficient precedent to pass the costs of the Consolidated Audit Trail on to broker-dealers.
T+1 for Europe: Crying wolf or real concerns?
Brown Brothers Harriman’s Adrian Whelan asks how prepared the investment industry is for the changes ahead, and if concerns about its implementation are justified.