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With MiFID II now confirmed and MAR just around the corner, Dave Tolladay of Alerts4 Financial Markets examines the key questions facing financial institutions having to increase trade surveillance monitoring spend while reducing costs.

Between €500m and €700m – that’s the estimated one-off compliance cost to be imposed on financial firms carrying out a review into MiFID II, according to a consultation report released by the treasury. The problem is that almost a year on from this document; financial firms have still been reluctant to increase spend on trade and comms surveillance. One possible reason is the contradictory challenge of needing to reduce costs while investing more in trade surveillance due to regulation. There is certainly no shortage of things to think about when it comes to regulation. For example, the extension of MiFID II to other asset classes brings a number of new surveillance requirements. But the complex nature of today’s markets makes it tricky for firms to extend existing surveillance technology across asset classes – all of which have different nuances. If this wasn’t enough to think about, the industry also has to factor in MAR on July 3rd.
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