A study by NPL found that 34 percent of respondents were unable to pinpoint specific deadlines for compliance.
The countdown to MiFID II is fully underway with only a few months until its implementation on January 3, 2018. However, ahead of its passage, a number of lingering concerns remain from firms regarding key deadlines and a general awareness of specific attributes.
MiFID II is poised to dramatically reshape the regulatory space in 2018. While firms have had ample time to prepare for the shift, many are still unprepared or have been slow to reconcile their upcoming compliance Obligations.
A recent study from the NPL, the UK's National Measurement Institute, corroborated this trend, suggesting that many firms could fall short of compliance by employing inefficient means of timestamping.
Leon Lobo, Strategic Business Development Manager, NPL, commented: "It is encouraging to see an understanding of the magnitude of the new regulations and a clear will from the UK finance industry to shape up for the Regulation. However, what is equally important is to ensure that the efforts of industry are not wasted and there is a clear grasp of what level of accuracy constitutes compliance.”
The regulations are designed to facilitate greater market oversight, transparency, and reporting requirements. More specifically, this includes shoring up regulatory technical standards (RTS 25) that will necessitate that all trades be timestamped to Coordinated Universal Time (UTC) with a high level of precision.
To date, one of the most common methods currently used for timestamping is Network Time Protocol-based Internet Time – the study found that 56 percent of respondents employ it. This method is only accurate to the tenth of a second and while suitable for human trading, it cannot remain a solution for high frequency trading HFT and non-HFT. These methods require 100 microsecond and one millisecond accuracy respectively, under RTS 25.
Steep fines for non-compliance
Subsequently, timestamps will need to be accurate to within 100 microseconds of UTC for HFT. Firms that are non-compliant with MiFID II regulations will risk fines of up to €5 million euros, or 10% of global turnover.
The report did indicate that top line awareness of MiFID II was high among those surveyed, with 91 percent of firms being aware of the regulation itself. However, while 75 percent of these claimed to understand the deadline for compliance, nearly 66 percent were unable to pinpoint the precise date for the new regulations.
Many surveyed individuals instead chose dates later than the January 3, 2018 deadline, suggesting that they would lapse on specific requirements. Consequently, this trend underscores the need for improved education across the industry in terms of MiFID II obligations.
Survey findings
Overall, the study included a panel of 200 professionals responsible for operations and compliance across the UK financial sector. This included a composite of banks, hedge funds, analyst firms, investment management firms, and data centers.
Moreover, the survey also highlighted the continued reliance on GPS for timestamping, with 14 percent of financial services professionals using it. By extension, nearly 79 percent of these individuals utilizing GPS experienced issues doing so. This included issues such as drop out, loss of accuracy, lack of synchronization, and leap second issues.
Under RTS 25, the optimal method to deliver a precise time signal is UTC delivery by fiber from a national timing institute. Overwhelmingly, consensus research has shown that fiber optics are more than up to the task of achieving accuracy better than 100 nanoseconds.
Unfortunately, just 21 percent of respondents in the survey were currently using this method to keep to time. 32 percent of those surveyed are however taking steps towards compliance, and endorse the new timestamping techniques. These figures still suggest that many firms will short of the regulations by the imposed deadline.
"Many of the current methods are problematic and opting to improve these will not guarantee the highly-accurate time standard which will ensure timestamps are easily certified,” explained Mr. Lobo.
The countdown to MiFID II is fully underway with only a few months until its implementation on January 3, 2018. However, ahead of its passage, a number of lingering concerns remain from firms regarding key deadlines and a general awareness of specific attributes.
MiFID II is poised to dramatically reshape the regulatory space in 2018. While firms have had ample time to prepare for the shift, many are still unprepared or have been slow to reconcile their upcoming compliance Obligations.
A recent study from the NPL, the UK's National Measurement Institute, corroborated this trend, suggesting that many firms could fall short of compliance by employing inefficient means of timestamping.
Leon Lobo, Strategic Business Development Manager, NPL, commented: "It is encouraging to see an understanding of the magnitude of the new regulations and a clear will from the UK finance industry to shape up for the Regulation. However, what is equally important is to ensure that the efforts of industry are not wasted and there is a clear grasp of what level of accuracy constitutes compliance.”
The regulations are designed to facilitate greater market oversight, transparency, and reporting requirements. More specifically, this includes shoring up regulatory technical standards (RTS 25) that will necessitate that all trades be timestamped to Coordinated Universal Time (UTC) with a high level of precision.
To date, one of the most common methods currently used for timestamping is Network Time Protocol-based Internet Time – the study found that 56 percent of respondents employ it. This method is only accurate to the tenth of a second and while suitable for human trading, it cannot remain a solution for high frequency trading HFT and non-HFT. These methods require 100 microsecond and one millisecond accuracy respectively, under RTS 25.
Steep fines for non-compliance
Subsequently, timestamps will need to be accurate to within 100 microseconds of UTC for HFT. Firms that are non-compliant with MiFID II regulations will risk fines of up to €5 million euros, or 10% of global turnover.
The report did indicate that top line awareness of MiFID II was high among those surveyed, with 91 percent of firms being aware of the regulation itself. However, while 75 percent of these claimed to understand the deadline for compliance, nearly 66 percent were unable to pinpoint the precise date for the new regulations.
Many surveyed individuals instead chose dates later than the January 3, 2018 deadline, suggesting that they would lapse on specific requirements. Consequently, this trend underscores the need for improved education across the industry in terms of MiFID II obligations.
Survey findings
Overall, the study included a panel of 200 professionals responsible for operations and compliance across the UK financial sector. This included a composite of banks, hedge funds, analyst firms, investment management firms, and data centers.
Moreover, the survey also highlighted the continued reliance on GPS for timestamping, with 14 percent of financial services professionals using it. By extension, nearly 79 percent of these individuals utilizing GPS experienced issues doing so. This included issues such as drop out, loss of accuracy, lack of synchronization, and leap second issues.
Under RTS 25, the optimal method to deliver a precise time signal is UTC delivery by fiber from a national timing institute. Overwhelmingly, consensus research has shown that fiber optics are more than up to the task of achieving accuracy better than 100 nanoseconds.
Unfortunately, just 21 percent of respondents in the survey were currently using this method to keep to time. 32 percent of those surveyed are however taking steps towards compliance, and endorse the new timestamping techniques. These figures still suggest that many firms will short of the regulations by the imposed deadline.
"Many of the current methods are problematic and opting to improve these will not guarantee the highly-accurate time standard which will ensure timestamps are easily certified,” explained Mr. Lobo.
BGC Group Secures Backing from Global Banks for New $600M Trading Platform
Network, Learn, Grow | FMAS:24
Network, Learn, Grow | FMAS:24
Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
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Get ready to mark your calendars for FMAS:24, returning this May! Take a quick glimpse of what awaits at the Sandton Convention Centre in Sandton, South Africa from May 20-22, 2024.
Don't miss out on this 5-second invite packed with energy and urgency!
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
🔗 LinkedIn: https://www.linkedin.com/showcase/financemagnates-events/
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Don't miss out on our latest videos, interviews, and event coverage. Subscribe to our YouTube channel for more!
Here's a sneak peek into the FMAS:24 vibrant atmosphere! Join us at Africa’s premium financial event for a transformative experience that combines the best of finance and technology.
From May 20-22, 2024, the Sandton Convention Centre in Sandton, South Africa, will be the hub for over 3,500 attendees to engage in unparalleled networking opportunities, learn from over 150 industry-leading speakers, and explore innovations from 120+ exhibitors.
Secure your free ticket now 🔗 https://events.financemagnates.com/yQx0l?utm_source=youtube&utm_campaign=fmas-is-back&utm_medium=video&RefId=FMAS24+Video+Ad+%5B1%5D
#fmas24 #fmas #fmevents #financeinafrica #traders #investors #affiliates #forexTraders #investmentOpportunities #B2BNetworking #finTech #Innovations #TradingCommunity #BusinessOpportunities #AfricanBusiness #Johannesburg #southafrica
📣 Stay updated with the latest in finance and trading!
Follow FMevents across our social media platforms for news, insights, and event updates. Connect with us today:
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Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 | Africa's Premium Financial Event
Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Looking to expand your network in #Africa? Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
📣 Stay updated with the latest in finance and trading!
Follow Finance Magnates for news, insights, and event updates across our social media platforms. Connect with us today:
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Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Join 3500+ Attendees at FMAS:24 - Africa's Premium Financial Event
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Looking to expand your network in #Africa?
Join 3500+ attendees at FMAS:24, where online trading, fintech, payments, and crypto meet! Connect with industry leaders and innovators for an unmatched networking experience.
20-22 MAY 2024
Sandton Convention Center, Sandton, South Africa
Register now to secure your spot: https://bit.ly/3JbUpCK
#fmas #fmas24 #fmevents #networking #finance #africa
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Where the Prop Trading Industry Goes from Here | Finance Magnates Podcast
Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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Explore the tumultuous world of prop trading in this Finance Magnates podcast episode, featuring insights from Head of Axi Select, Greg Rubin.
We're discussing the challenges and shifts caused by MetaQuotes' pivotal decisions affecting MT4 and MT5 users, and how Axi Select offers a unique, realistic path to professional trading, steering clear of traditional prop firm pitfalls.
Tune in for expert analysis on the future of trading and innovative funding models.
The Axi Select programme is only available to clients of AxiTrader Limited. CFDs carry a high risk of investment loss. In our dealings with you, we will act as a principal counterparty to all of your positions. This content is not available for AU, NZ, EU and UK residents. For more information, refer to our Terms of Service. Standard trading fees apply.
This content is provided solely for general informational purposes and should not be construed as financial product advice or an investment recommendation. It has been prepared without considering your personal circumstances.
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