IT directors at financial services firms must start lobbying now for extra funds for projects to comply with the Markets in Financial Instruments Directive (Mifid) or risk missing the November 2007 deadline, according to Ash Saluja, a partner at City law firm CMS Cameron.
Speaking today (3 July), Saluja argued that though the exact requirements of Mifid are not due to be finalised by the UK's Financial Services Authority (FSA) until January 2007, IT directors need to lay the groundwork for Mifid-related projects now.
"Some firms are still in denial and have not got their Mifid projects off the ground," said Saluja. "IT directors need to be talking to their compliance departments and need to be shouting about budget now, because it is over the summer that those budgets for next year will be decided."
He added that there is an IT element for virtually all the requirements of Mifid, which is intended to harmonise regulations across the European Economic Area for handling financial instruments, such as securities and derivatives.
For example, the new regulations will require firms dealing in equities to disclose the prices at which they conduct all transactions and reclassify their customers - both of which will require many firms to develop new systems, according to Saluja.
But with the exact requirements still not finalised, Saluja warned that IT chiefs will face tight deadlines to get new systems in place. "We can't give IT departments a complete heads up [over what to do] because all the rules will not be confirmed until January," he said. "It means that IT directors need to look to design systems that include flexibility."
