Despite some last-minute European Commission concessions, the UK's securities industry is still looking at a £1 billion price tag for complying with the Markets in Financial Instruments Directive (MiFID), says consultancy Atos.
The EC formally tabled its proposals for the new framework yesterday, after months of intense lobbying by securities industry participants who have grown increasingly alarmed at the tight timeframes and escalating costs of compliance.
Despite adopting a principles-based approach on requirements for order handling and best execution - and dropping the onerous demands for voice recording that were evident in earlier drafts - the EC has still presented the securities industry with a formidable mountain to climb says the consultancy . "Whilst there are significant savings from the pragmatic implementation of some of the requirements on a principle basis...the potential increase in infrastructure costs will cause the UK industry costs to remain over £1bn."
Atos suggests that major investment firms with big budgets and resources could grab significant volume and liquidity, with the losers coming from slower-moving and smaller second-tier firms.
The proposals were also fiercely criticised by the UK Consumer Panel, which says the introduction of the new regime will lead to an erosion of consumer rights in relation to fee disclosures, and a disparity in standards across Europe.
John Howard, chairman of the Financial Services Consumer Panel says: "We must make sure that, in the laudable aim of making it easier for consumers to access financial services in a single market across Europe, we do not lose all of the consumer protection that has been built up in the UK, and that consumers have come to rely on."