The requirements for IT. Marcin Werner’s comment on Karol Materna’s article “Zdążyć przed MiFID2” (English: “How to Fulfil the MiFID2 Requirements on Time”), Miesięcznik Finansowy Bank, 03/2016.

The requirements for IT

Many MiFID II/MiFIR requirements shall have a significant impact on IT in the organisations, which are subject to those requirements. The requirement of transaction reporting to the Polish Financial Supervision Authority shall now also extend to instruments admitted to MTF and OTF, and, in the future, also IRS, FRA, and OIS transactions or the transactions in which the underlying instrument is admitted to the regulated market, MTF, or OTF. Therefore, it shall not be possible to do all the reporting in the manner in which it has been done so far, through the stock exchange. The amount of the transmitted information is increasing considerably and is not much less than in the EMIR reporting. The option of reporting through trade repositories – which means connecting EMIR and MiFIR reporting – is being considered. Also, transparency before and after transactions is an important requirement for IT. Many Polish entities shall be subject to the new definition of systematic internalisation (SI) while SI are obligated to transmit, on an ongoing basis, transaction valuations to its clients. The realisation of that requirement shall entail the implementation of a dedicated platform for communicating with clients, which would ensure the transfer of orders to clients and from clients. The complexity of requirements concerning relationships with clients is also increasing. Apart from the suitability test it shall also be obligatory to verify if the client’s “aims, needs, and characteristics” agree with the “target market” of the product. That shall require, inter alia, in institutions that have many branches, the implementation of a tool for conducting, monitoring, and reporting on tests.

Marcin Werner