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MiFID II / MiFIR seminarPlanning your MiFID II / MiFIR ProjectHannah Meakin, PartnerNorton Rose Fulbright LLP15 October 2014
Planning your MiFID II / MiFIR Project
Macro themes in your MiFID II / MiFIR project
Macro theme 1: Strategic implications – group
reorganisation necessary due to changes in
exemptions and third country requirements?
Macro theme 3: Conduct of business – many small
amendments which add up to significant changes
including amendments to terms of business
Macro theme 2: Dealing effectively with the new markets requirements –
OTFs, algorithmic trading, position limits, increased
transparency etc
Macro theme 4: Creating a project team – the key
question is how you keep track of the mass of paper
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Indicative timings for initial project planningDates Key events What firms should be doing
Q4 2014 Dec – ESMA to submit technical advice to CommissionDec – ESMA to consult on RTS and ITS
• Determine business impacts• Influence priority areas• Form core project team
Q1 2015 We would expect ESMA consultation to close before March
• Use consultation to refine impact assessment• Respond or feed into industry responses• Initial gap analysis on conduct requirements
Q2 2015 We expect to see FCA discussion/consultation papers on implementation
• Use FCA papers to refine gap analysis on conduct issues• Respond or feed into industry responses• Initial thinking on what structural issues arise from markets changes
Q3 2015 July – ESMA to submit final RTS to Commission • Plan what work needs to be done on conduct issues• Make decisions on structural issues resulting from markets
changes
Q4 2015 Dec – ESMA to submit final ITS to Commission • Start implementing any structural changes
Q1 2016 We would expect significant applications to be submitted to FCA – e.g. new OTFs and MTFs and APAs
• Continue implementing any structural changes – e.g. prepare applications and documentation for OTFs
• Start implementing conduct issues
Q2 2016 We would expect less complex applications to be submitted to FCA – e.g. commodities trading firms
Q3 2016 • Firms will want to be finalising new arrangements and changes to relationships with other firms
Q4 2016 • Firms with end clients should be amending documentation by now
3 Jan 2017 Implementation of most provisions
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First steps
Determiningthe impact and
who needs to be involved in your project
Is there anything you no longer want to do?Is there anything you need to delegate to another firm?Do you need to reorganise any business lines? e.g. conflicts restrictions on OTFs and SIs
Is there anything about your business that can’t work the way it does now? e.g. research third party payments client categorisation changes/
appropriateness DEA
Is there anything you do that will come into regulation in a new way?e.g. any exemptions you can no longer
rely on any new permissions needed services that require notification third country affiliates
Are there any brand new arrangements you’ll need?e.g. transparency – APAs market making and DEA
agreements market monitoring
What arrangements will you need to extend or upgrade? systems and controls e.g.
− algorithms policies and procedures e.g.
− transaction reporting− best execution
How will all of this need to be reflected in documentation?e.g. client facing – terms of business market facing - agreements internal – policies and procedures
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Key questions What is your business? Who are your clients? Who else do you rely on?
Angles to consider Your own perspective What your clients need How your service providers may
change – what do you need to know about their plans?
The process in overview
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7 step action plan
1. Identify Identify the areas of regulatory change introduced by MiFID II/MiFIR which are likely to impact the firm
2. Governance Establish an internal structure to ensure the relevant people are involved
3. Business strategy
Conduct a high level assessment to identify how MiFID II/MiFIR will impact business strategy and revenue
4. Gap analysis Identify regulatory gaps and any new requirements
5. Plan & budget Be aware of key events and plan stages of implementation in line with timeline and budget
6. Implementationmeasures
Design a system to address the implementation measures and begin the implementation process
7. Training and awareness
Ensure the firm is aware of the regulatory changes and provide bespoke training accordingly
How we can help you
The Norton Rose Fulbright team
MiFID II / MiFIR seminar8
Legal
Buy-side
Retail
Banking Markets
Regulatory Risk and
Compliance
Government Relations and Public Policy
Knowledge
Wholesale
Friends in other
countriesUK France Germany Italy Netherlands Poland Belgium Greece Outside
the EU
Identifying the mix of what you need
Legislative positioning: Not for all players but for some
there are some key positioning issues
Structural advice: A mix of skills needed for this and a
great example of the collapse of the front/back
office divide
Redoing the documentation: The traditional legal skill,
e.g. conflicts and best execution. A lot of emphasis
on this in MiFID II
Risk and compliance: Changes to practical
procedures and systems and controls needed
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Your MiFID II COBS project
MiFID II / MiFIR seminar10
Online questionnaire
Tests the robustness of your existing systems, policies and procedures
Free!
Next day emailed response from NRF
Highlights gaps in COBS practices to MiFID II
Free!
From January
2015
COBS Checker
COBS Gaps
MiFIDAssist
MiFIDExpert
For firms that may only need to make small tweaks to current practices and want to do it themselves
Composite toolkit for each COBS area
Fixed price per toolkit
Separate handholding as required
Final NRF legal and compliance review of implementation
For firms that may need more wholesale changes or do not have the time to do it themselves
Team of experts
Traditional implementation project
Fixed fees for project
Implementation from both legal and compliance perspective
Your MiFID II markets project
MiFID II / MiFIR seminar11
Our MiFID II programme in overview
12 MiFID II / MiFIR seminar
15 October 2014: Norton Rose
Fulbright MiFID II seminar in London
MiFID II seminars in Norton Rose
Fulbright offices in the EU
Client briefing notes on various elements
of MiFID II
Regular updates on our new blog –
Financial Services: Regulation tomorrow
Updates to our online technical resource:
Pegasus
Video commentary
Further coverage in our 40 minute
briefings
Client special alert emails as the major developments occur
Ad hoc client flyers and specialist
products
Further specialist seminars in 2015
including outside EU
Traffic lights, COBS Checker and MiFID
Assist/Expert
MiFID II & MiFIRMarkets: Scope & Impact Analysis
Pegasus
13 MiFID II / MiFIR seminar
Jonathan HerbstPartner+44 20 7444 [email protected]
Hannah MeakinPartner+44 20 7444 [email protected]
Peter SnowdonPartner+44 20 7444 3912peter.snowdon@nortonrosefulbright. com
MiFID II / MiFIR team
Imogen GarnerPartner+44 20 7444 2440imogen.garner@nortonrosefulbright. com
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Conor FoleyAdvisor – Government and regulatory affairs+44 20 7444 [email protected]
Lisa LeeRegulatory and compliance advisor+44 20 7444 [email protected]
Simon LovegroveHead of financial services knowledge+44 20 7444 [email protected]
MiFID II / MiFIR team
Charlotte HenrySenior Associate+44 20 7444 [email protected]
Kennedy Masterton - SmithSenior Associate+44 20 7444 [email protected]
Anushka HerathSenior Associate+44 20 7444 [email protected]
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Jamie GrayAssociate+44 20 7444 [email protected]
Matthew GregoryAssociate+44 20 7444 [email protected]
Jack PrettejohnAssociate+44 20 7444 [email protected]
Tara MokijewskiOf Counsel+44 20 7444 [email protected]
Adrian SheddenAssociate+44 20 7444 [email protected]
Mark ChalmersAssociate+44 20 7444 [email protected]
Iona WrightAssociate+44 20 7444 [email protected]
MiFID II / MiFIR team
Catherine BlakeAssociate+44 20 7444 [email protected]
Jochen VesterAssociate+44 20 7444 [email protected]
Josie CollyerAssociate+44 20 7444 [email protected]
Lucy AxfordAssociate+44 20 7444 5268 [email protected]
Alfred BridiAssociate+44 20 7444 [email protected]
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DisclaimerNorton Rose Fulbright LLP, Norton Rose Fulbright Australia, Norton Rose Fulbright Canada LLP, Norton Rose Fulbright South Africa (incorporated as Deneys Reitz Inc) and Fulbright & Jaworski LLP, each of which is a separate legal entity, are members (‘the Norton Rose Fulbright members’) of Norton Rose Fulbright Verein, a Swiss Verein. Norton Rose Fulbright Verein helps coordinate the activities of the Norton Rose Fulbright members but does not itself provide legal services to clients.References to ‘Norton Rose Fulbright’, ‘the law firm’, and ‘legal practice’ are to one or more of the Norton Rose Fulbright members or to one of their respective affiliates (together ‘Norton Rose Fulbright entity/entities’). No individual who is a member, partner, shareholder, director, employee or consultant of, in or to any Norton Rose Fulbright entity (whether or not such individual is described as a ‘partner’) accepts or assumes responsibility, or has any liability, to any person in respect of this communication. Any reference to a partner or director is to a member, employee or consultant with equivalent standing and qualifications of the relevant Norton Rose Fulbright entity.The purpose of this communication is to provide information as to developments in the law. It does not contain a full analysis of the law nor does it constitute an opinion of any Norton Rose Fulbright entity on the points of law discussed. You must take specific legal advice on any particular matter which concerns you. If you require any advice or further information, please speak to your usual contact at Norton Rose Fulbright.
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