The latest piece of European-wide financial legislation, the Markets in Financial Instruments Directive (Mifid), came into effect on November 1, but it is estimated that many organizations are not in a position to comply because they lack suitable record-keeping procedures.
Mifid aims to establish a single market and regulatory regime for investment services across the 30 member states of the European Economic Area, which comprises the 27 EU member states, plus Iceland, Norway, and Liechtenstein.
According to Ovum senior analyst Mike Davis, because organizations are unclear about who is responsible for enforcing Mifid, they are holding back and taking a wait-and-see approach. There is also the complication that some parts of the directive are mandatory, while others are discretionary.
It is believed that financial firms generally have the IT plans in place to enable compliance but have yet to execute them.
The legislation applies to European-based organizations plus those listed elsewhere but who operate in the region. Organizations listed in the US will have a advantage when it comes to compliance because of the work they had to put in to comply with the Sarbanes-Oxley Act.