June 22 by Conga


What is MiFID II?

The Markets in Financial Instruments Directive (MiFID)  is a European legislation initiative that first was introduced in 2004 that anyone dealing with European financial markets should be aware of. The directive’s main objectives were to increase competition and consumer protection in investment services, fully replacing the Investment Services Directive (ISD) from November 2007. MiFID kept evolving and beginning around 2010 the European Union Commission started work on the even more rigorous MiFID II which came into effect in 2014. The Commission determined that the implementation date for MiFID II and the Markets in Financial Instruments Regulation (MiFIR) would now be January 3, 2018.

How MiFID II is Going to Impact You

  1. Research Teams: Research needs to be separated from execution. From now on, any trade commission will be paid directly for best execution; whereas payment for research will be paid separately, and directly to the research content provider. According to Bloomberg Professional Services and Frost Consulting: “MiFID II may be a watershed event in the development of the research cost analysis (RCA) market. Multi-asset class monetary research budgeting requirements will lead asset managers to a far more granular understanding of the dollar costs of specific un-priced research products.”
  2. Asset Management Teams: Asset management will have to manage customer data in the cloud for improved reporting capabilities. It is recommended to put a strong emphasis on how you manage your approval processes, contracts generation, management processes, and your product governance. For example: which funds can be sold to which customers.
  3. Legal Teams: For contract management, Importing 3rd party legacy contracts to the cloud in order to have a way to search them, mass amend them, regenerate and e-sign them is becoming ever so crucial.
MiFID II Summary

Who Exactly Needs to Comply?

If you are classified as an investment firm (roughly 7,000 companies are classified as such) and have any exposure to the EU markets you should comply. Experts say that this change is bound to impact other markets who will adopt similar standards in order to meet their global clients’ needs.

What Can You do to Prepare?

There are two options, and only one recommended:

  1. The recommended option: consider the outcomes you are trying to achieve and plan for the right IT solution using Apttus. Let us set the objectives here: Compliance – first and foremost, make sure you meet all MiFID II requirements.  Improved business outcomes – understand that this is a wonderful opportunity to invest in the right systems that will enable you not only to comply with the impending regulation but also to achieve improved ROI on your IT and prevent revenue leakage on your daily activities.
  2. The alternate option:  (Disclaimer – not recommended but might work.) Improve your legacy systems using internal IT and hire a consulting firm to help. Financial Institutions must ponder though: is this going to get you the best results in a timely manner?

Top 10 Points to Consider

Apttus Recommends a single system that:

  1. Contains all activities related to a specific customer.
  2. Captures pricing that is applied to all research activities.
  3. Gives a full, clear picture of all quotes, contracts, and billing events for each customer.
  4. Enables you to import legacy contracts to the cloud.
  5. Enables you to quickly generate contracts.
  6. Connects internal teams with the ability to control permissions and visibility.
  7. Enables complete tracking of your activities against obligations.
  8. Enables contract pricing to easily set prices for products.
  9. Provides you with the ability to control your product governance.
  10. Integrates fully with your CRM.

Becoming the Chosen One

Make sure your chosen solution ensures compliance with MiFID II. This will drive four outcomes:

  1. Clear visibility into your research pricing;
  2. Organization of your data that improves utilization of your CRM;
  3. Boosting revenue while lowering costs;
  4. Providing a single, integrated view inside your CRM. This will also help EU companies comply with the General Data Protection Regulation (GDPR) which will be enforceable beginning in late May, 2018. For Brexit, this affords the ability to mass amend contracts and maintain different templates for different countries and/or languages, which supports Brexit use cases.

By implementing the Apttus integrated Configure Price Quote and Contract Management solution, your company will be ready. Contact Elad Cohen to learn more about the Apttus MiFID II industry solutions.

Integrating CPQ and CLM, provides significant benefits in an optimized Quote-to-Cash process. Download the whitepaper now to learn more.


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