I’ve just been in Paris, and attended the plenary meeting of MiFID Forum France (M2F). It’s interesting to see how much attention that they are paying to the data issues that MiFID is creating. Which fields of data will a firm have to publish, how will
each field be identified, have the regulators defined which fields will need to be in a transaction report – all very vital issues that come down to the fundamentals of IT. If you don’t have the information correctly defined, you can throw as much technology
as you like at the problem but all that you will achieve is making problems happen faster.
Having international standards for information – definitions, formats, etc – is one step in the right direction. There are key “hubs” in a financial community – the ones that everybody in an industry sector has to communicate with. In equities and fixed
income markets, those hubs are usually the local stock exchange and CSD; in the derivatives market, it’s the local derivatives exchange and clearing house, etc. The one hub that everyone definitely has to communicate with is their national market regulator.
Have European national regulators been using international standards? As a general rule – nope! But the impact that it will have when national regulators adopt ISO data standards for transaction reporting is going to be significant, because investment
firms across Europe will have to start using ISO data standards too. Standards help to make information easier to compare, which makes performance easier to compare, and that transparency increases competition in the market.
It’s interesting that French investment firms are pushing for the adoption of ISO data standards. What’s your firm doing?