Swift to establish MiFID working group

Swift to establish MiFID working group

Financial network Swift says it is establishing a standards working group to ensure any future ISO message standards comply with the EU's Markets in Financial Instruments Directive (MiFID), which is expected to come into force in November 2007.

Swift says it has completed an initial analysis of the impact of MiFID on ISO 15022 and ISO 20022 standards and some minor changes will be required to ensure the message suite is 100% MiFID compliant.

These changes will be made in consultation with the industry to ensure messages are compliant and available for use by November 2007.

Johan Kestens, head of marketing at Swift, says: "This analysis shows that ISO standards are the way to go for the securities industry. They can cope with existing and future regulation."

Swift says invitations to participate in the standards working group have been sent and the initial meeting will take place in early January 2006. In addition to MiFID, the working group will address other standards-related issues including the Giovannini reforms and other harmonisation initiatives.

The new MiFID directive will enable banks to offer financial products across all 25 EU member states. Banks will be able to trade shares internally, off-exchange, but will be required to publish the prices of intended trades to the rest of the market beforehand.

But the new rules have been heavily criticised by industry bodies including The European Banking Federation (FBE), The Federation of European Securities Exchanges (FESE) and the UK's Financial Services Authority (FSA).

Analysts estimate that capital markets firms will be forced to spend up to EUR1 billion on technology in order to comply with the directive, but a recent survey released by Sun Microsystems found that almost half (46) of financial institutions claim not to understand the implications of MiFID, despite the majority (92%) stating that regulatory compliance would be an 'important' or 'very important' driver of business strategy.

Earlier research published by the MiFID Joint Working Group (JWG) found that more than two-thirds of London-based investment firms do not have - or do not know if they have - a framework in place for complying with the directive.
Download MiFID JWG report

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