IMP Partners UnaVista to Prepare US Asset Managers for Mifid Shock

Jane Stabile, president of IMP, tells WatersTechnology that it went with UnaVista because the reporting specialist is owned by the London Stock Exchange Group. As such, it has been dealing with reporting requirements stemming from the Markets in Financial Instruments Directive (Mifid) since the first iteration of the rule went live in 2007.

The revised requirements of the original Mifid, which together with an accompanying regulation form a package of regulatory reform known as Mifid II, will enter into force on January 3, 2018. While targeted at European firms, Mifid II is expected to have a significant impact on US asset managers that deal with European counterparties—or those who have their own operations on the continent.

“They’ve been doing Mifid reporting for some time, so this is just Mifid ‘two’ for them,” she says. “For some of the US vendors, this is the first time around for them. Given the timelines, there’s not a lot of time to get vendors vetted, so we thought that they were one of the most qualified.”

She also says that UnaVista being registered as a trade repository under the European Market Infrastructure Regulation, and as an Approved Reporting Mechanism under Mifid II, played a major role in IMP’s decision.

“We’re trying to get a couple projects up very quickly, so we need to be able to get in there and test with a firm that we know is going to be able to report successfully. We don’t have time to test that piece; we can only test from our client to them, so we needed to know that they were already up and running, and everything works on their side,” she adds.

As a result of the deal, IMP can run test programs within UnaVista’s Mifir User Acceptance Testing environment to prep for January 3. IMP, for its part, will look to help buy-side firms based in North America to make sure that their workflow processes aren’t disrupted by the mandate.

Since IMP is focused on the order management system (OMS) space, their aim is to work with shops that are either upgrading their OMS or that are trying to avoid an upgrade by automating workflows and identifying what will still has to be handled manually by a portfolio manager or investment decision maker.

Stabile says that the bigger US firms—those managing assets over $100 billion—have been preparing for Mifid II since Q4 2016, and were “well on their way” by Q1 2017. She says where there’s a lag is in the sub-$50 billion assets under management space—and, particularly, firms with $20 billion and under. There, she says, “we’re seeing firms that are in no way prepared and they’re just getting their arms around it. For them, it’s going to be really tough.”

She adds: “They are hearing discussions of ‘Can we pull back to the US?’ if we only have one or two traders in the Eurozone. But for firms with a sizable footprint, that’s not an option considering the short timeframe.”

Buy-side readiness for Mifid II has been a topic of some debate in the industry this year, despite a delay to the initial compliance date of January 3, 2017 of one year ordered by the European Commission and Parliament. That delay was partly due to concerns that firms would be unable to put technology in place within an appropriate timeframe to ensure compliance.

However, there is mounting concern that even with the delay, compliance could be spotty at best come January 3. Industry estimates range wildly in their assessments, with some claiming that extraordinary numbers of firms will not be ready. Regulators in the UK and elsewhere have indicated that they will be patient with firms who are not entirely compliant, but that they expect significant efforts to be underway towards abiding by the new regime.