MiFID – seize the moment
Jinfo Blog

24th October 2007

By Tim Buckley Owen

Item

Once the preserves of entirely separate professions, records management and information management are now converging fast. No sector remains untouched – health, education, government, but especially business. New and higher levels of regulatory, compliance and risk management concerns are behind the change says the information consultancy Outsell, which has produced a $395 12-page briefing on the phenomenon. Information Management's Role in Enterprise Records Management http://www.outsellinc.com/store/products/531 provides benchmark information about how records management is handled in different organizations, where the function is managed, and what activities it typically encompasses. Outsell’s briefing concludes with some ‘imperatives for information managers who choose to go the records management route’ – and although it’s an American offering, its arrival might just prove timely for European corporate information professionals who are currently considering the implications of the European Commission’s Markets in Financial Instruments Directive. MiFID comes into effect on 1 November and, as the UK’s Financial Services Authority explains, http://www.fsa.gov.uk/Pages/About/What/International/EU/fsap/mifid/index.shtml it incorporates new transparency requirements for equity markets, and much more extensive transaction reporting requirements. According to JWG-IT, a financial services industry think tank http://www.jwg-it.eu/070portal/loadPublicPage.do?page=public/index.jsp MiFID is also causing investment firms a bit of a headache. The Directive introduces a minimum of 55 new requirements for record keeping, in which the financial institution is accountable for storing and retrieving both structured and unstructured data in the context in which it was created – yet 64% of investment firms still have significant work to do to be ready for MiFID’s record keeping demands. As the Out-Law newsletter from international law firm Pinsent Masons explains http://www.out-law.com/default.aspx?page=8555 article 51 of MiFID demands the retention of certain records by financial firms for at least five years. Others must be kept for the duration of the relationship with a client, and retention must be in a manner that allows national regulators ‘to access them readily and to reconstitute each key stage of the processing of each transaction’. ‘If you get caught out with it wrong, it could cost you hundreds of thousands of euro in fines,’ says JWG-IT’s Chief Executive PJ Di Giammarino. ‘If what you have given to the regulators, the market and your customers does not match what you hold internally for up to five years from 1st November, you are exposing yourself to new risks.’ Organisations that do not have a strong record keeping capability will need to appoint a senior records manager to take responsibility for this enterprise-wide project without delay, JWG-IT goes on to warn. For information managers who are thinking of taking Outsell’s advice and going the records management route, the opportunity seems too good to miss.

« Blog