MiFID II is an EU framework implemented to standardise financial practices and protect investors in the wake of the 2008 financial crisis. Under MiFID II, firms designing, manufacturing, and distributing financial products need to collaborate to ensure all costs and charges are disclosed properly to customers.
Current data exchange systems between firms are inconsistent due to the cumbersome and costly transparency rules of MiFID II. TISA, a UK financial services membership body, aims to create an industry-wide platform called TISA Universal Reporting Network (TURN) to disseminate funding related data. Developing a standardised European MiFID II Template (EMT) will improve the collection and transmission of MiFID II data across Europe to stakeholders.
Despite MiFID II being put in place to guarantee full transparency in the financial sector, copious, stringent reporting rules have muddied the waters. Smaller firms are unable to cover the costs involved in the dissemination of EMT data, leading them to consolidate with larger firms.
Moreover, MiFID II rules are being interpreted inconsistently across the board, particularly when there is a lack of data from third parties. The lack of uniformity makes it difficult to provide like-for-like comparisons of costs for consumers, which can lead to non-compliance.
MiFID II calls for strong collaboration between firms across Europe to ensure that all costs are disclosed properly to customers. With data exchanges spanning a continent, and the involvement of various players, robust data systems are needed to streamline and standardise reporting.
Due to the complexities of the data reporting required, siloed controls, and inflexible technologies will come under scrutiny. Outdated approaches usually struggle to process data from various sources, particularly when the scope of the reporting is so broad. This can lead to inaccuracies and errors, which can have serious financial and reputational consequences for firms.
ByzGen’s Blockchain-enabled solution makes it easier for firms to meet the rigorous compliance requirements of MiFID II. With an immutable record of transactions, companies are able to log their compliance effectively. The chances of human error or internal fraud dissipate, reducing the reporting burden for financial firms.
Regulators can become fully entwined in the analysis process with ByzGen’s DLT platform. Instead of looking on from the sidelines, they will have real-time access to data and become active participants in the process. While hugely beneficial for regulators, this openness also drives efficiency and, consequently, reduces costs for financial firms.
Reducing the risk of non-compliance is the overarching aim of ByzGen’s Blockchain platform. Ensuring data quality and guaranteeing data availability can help firms meet the strict MiFID II compliance standards, without adding costs or unnecessary internal processes.
As a DLT solution, FALKOR has proven its value in a regulatory ecosystem by ensuring more streamlined processes for everyone involved — from regulators to consumers. With a single version of the truth, a standardised methodology and absolute transparency, relationships with investors can improve to deliver future industry growth.
TISA aims to turn the world of MiFID II compliance on its head. With our Blockchain-enabled platform, ByzGen will help companies tackle difficult regulatory requirements with streamlined, efficient data processes.
Blockchain provides an enhanced level of data assurance for businesses throughout regulatory environments, driving transparency and reducing related overheads.
