The MiFID 2 (the Directive) covers a large number of topics, including the requirements applying to approved reporting mechanisms and other authorised bodies supporting the legislation. MIFIR (the Regulation) covers, among other things, the detailed reporting obligations of individual firms. Even before all of the standards have been finalised and approved, it is clear that the reporting burden on regulated firms from MIFIR will be greater than for MiFID and EMIR put together.
This is due to the aggregated scope of reportable products (including FX derivatives, cash securities trades, swaps), additional transaction types (financing transactions, primary issues, results of option exercise) and the greatly expanded scope of information required (national identification of retail clients, identity of the person or algorithm executing the trade). The overlap between the fields envisaged for MIFIR and those already reported for EMIR purposes is not so great as we might have hoped, and the two requirements will continue in parallel (MIFIR will not replace the EMIR requirement).
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What are financial firms to do about this imminent wave of regulation if they are not to turn over their entire IT department to satisfy the reporting requirements? The only approach which appears viable for small-to-medium-sized firms is to outsource the management of all of your transaction data and rely on a third-party to assess reportability under the various regimes, to format and route your data as appropriate and to report back to you with confirmation of what has been reported on your behalf. This last step is critical in order to support your internal assurance processes (as unfortunately you will retain ultimately responsibility under most of the regimes).
If you have an alternative vision for how these future requirements might be addressed, or any other comments on the above, I would be very interested to hear your thoughts.