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INDUSTRY FEATURE
MiFID
Pan-European trading made easy
The European Commission’s Markets in Financial Instruments Directive (MiFID) is intended to make it easier for financial services to operate throughout the European Union (EU) – by initially making things a little harder. But ILOG can help.
Part of the commission’s Financial Services Action Plan, MiFID is aimed at establishing comprehensive regulations for investment services and financial markets in the EU. The goal is to create a single, pan-European financial market by establishing uniform rules that make it easier for companies authorized to operate in one member state’s market to do so in others. The commission hopes MiFID will significantly lower capital costs for European companies, and at the same time, ensure strong investor protection by introducing an extensive set of new rules governing the relationship investment firms have with their clients.
MiFID is slated for implementation in November 2007, and sanctions for noncompliance will range from fines to suspension of trading rights. Even so, investment services haven’t been gearing up to apply MiFID’s rules, which will probably change often after their initial introduction.
ILOG: the fast way to full compliance
ILOG has proved with other key government legislation that its business rule management system (BRMS) enables companies to quickly comply with new regulations. When implementing MiFID, our BRMS will be especially helpful in two areas:
- Suitability and appropriateness tests – The tests determine whether an investment is suitable for a client. ILOG’s BRMS allows the conditions for investments to be quickly captured in rules, along with the appropriate client profile for each investment.
- Best execution – MiFID will commit services to getting the best deals for their clients, addressing not only price, but conditions such as costs, speed, likelihood of execution and settlement, and size and nature of orders. All these factors can be captured and applied with business rules.
MiFID will make trading easier but business a little harder with new regulations. But those companies that adopt ILOG BRMS will not only have an easy way to implement MiFID – even with existing systems – but a simpler, more effective way to implement all their business policies.
For more information, visit http://mifid.ilog.com.
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