Buy-side firms have been urged to begin making changes now to ensure compliance with MiFID II requirements aimed at protecting end-investors.
A report authored by GreySpark Partners described the revisions to MiFID II related to protection of the end-investor as ‘significant’.
The regulation requires asset management firms to ensure they are using sound product approval processes, defining and verifying target markets for end-investor products, classifying their clients and examining bundled services sold to end-investors.
Rachel Lindstrom, senior consultant at GreySpark and author of the report, said the new rules come under several categories, one of which is “codifications of existing best practices that have, to date, not been mandated by regulation.”
She explained: “Buy-side firms should not neglect [this] category, as these amendments to the legal text will have implications for any investment firm that does not yet adhere to industry best practices.”
The report has argued that buy-side firms must act now to ensure compliance with these rules by the January 2018 deadline.