More than 80% of Northern American banks are not on schedule to meet the current April 2007 deadline for complying with the EU-wide Directive On Markets in Financial Instruments (MiFID), according to financial consultancy Capco.
Although MiFID is a piece of European legislation, US banks that have operations in any of the member states within the EU will be impacted.
Capco says banks will take up to 10-14 months to implement the technology, procedures and guidelines to comply with the requirements, and more than 80% of North American banking institutions are not on schedule to meet the current April 2007 deadline.
Analysts estimate that MiFID willl cost the industry around EUR1 billion. Capco says the impact on a North American bank that has operations in the EU will rapidly reach EUR20 million.
The consultancy says banks that capitalise on regulatory synergies with the proposed Regulation National Market System (Reg NMS) and budget for MiFID compliance straight away stand to make considerable costs savings.
Although the final deadline for MiFID compliance is currently April 2007, rumours surfaced earlier this week that the deadline could be extended for a further six months to 1 November 2007 in order to give banks more time to prepare.