You will be only too aware of the MiFID II requirements – but is the rest of your business equally well prepared?
The Markets in Financial Instruments Directive II has implications not just for Compliance but for your Sales and Marketing teams and entire firm.
Here we look at how you can help your Marketing team comply with the new Directive.
What is different under MiFID II?
The first step in ensuring compliance with the new rules is understanding what’s needed.
You can read the near-final details of the new regulation published by the Financial Conduct Authority (FCA) in March this year.
Although recent reports suggest that the regulator will be lenient towards firms who have tried to comply, even if they are not fully ready by the 3 January 2018 deadline, as a Compliance team it’s your responsibility to ensure that your business is prepared.
What are the implications of MiFID II for marketing?
Many of the new regulations relate to your operation – but many more will have a direct impact on your marketing processes and financial promotions.
One of the biggest changes is that under the Directive, all communications to professional clients will be treated as financial promotions.
As well as needing to comply with the FCA’s requirements on financial promotion content, they will also have to go through the required approvals process, being signed off by a member of your team, before they can be issued.
How can you help your Marketing team?
- Training and education will be essential. They need to understand what constitutes a financial promotion, and what this means in terms of regulatory requirements.
- Make sure they are familiar with the rules around risk warnings – not just their use, but their size and prominence. Under the new Directive, risk wording needs to be in the same point size as the main text. Help your colleagues understand the obligations around disclaimers and prominence.
- The need for accurate and up-to-date information is another key area. Marketing, Sales and any other teams responsible for producing client presentations need to know how they can ensure PowerPoints are compliant.
- Appreciating how performance data should be displayed is essential. The Directive says that performance data in charts needs to be displayed differently for retail and professional clients. You may want to encourage the business to invest in a slide library or other tool that enables you to lock down compliant data. This can be an effective way to ensure no unapproved or inaccurate content slips through the net.
- Language is another are where promotions can fall foul of FCA requirements. Make sure your Marketing team understands the requirements around suitability and using wording appropriate for the audience. And educate them on the rules to help save time by writing Compliance-ready content.
- The new regulations will extend the lead time for promotional materials. Make sure that extra time is built into projects. Teams won’t just need to allow time to get to grips with the more stringent rules, but build in time for Compliance sign off professional client materials.
- Help them to make the content production process as efficient as possible. Automating some of your approval processes can help with more efficient project management – as well as preventing regulatory breaches by mandating compliance sign off.
- Do your Marketing colleagues produce all of your client communications? Often – particularly in professional services firms – materials are produced throughout the business. Your team will need to get a grip on all of the content produced, and make sure it meets FCA standards. Help colleagues to identify whether their financial promotions are out of control – and what do to about it if they are.
Practical guidance and advice
The new rules bring a raft of additional obligations for Marketing (as well as Compliance) teams.
But by helping them to understand what’s needed and how they can get prepared, your colleagues can make sure their financial promotions comply with MiFID II.
Source: Perivan Technology
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