Just 36% of investment managers said they were confident of hitting the deadline for the major capital market rule changes under MiFID II next year.
The finding – from among 183 professionals in Europe, the US and Asia – reflected that resources to implement MiFID II were competing with other regulatory demands, including tighter cybercrime measures.
Julian Korek, global head of compliance and regulatory consulting at Duff & Phelps, which carried out the survey, said more regulatory guidance on how firms should prioritise the implementation of regulations was needed.
The Duff & Phelps survey also found that investment firms’ spending on compliance is set to rise from about 4% to 6% in the next five years.
Nearly nine out of 10 financial services firms said they intend to increase the time and resources they spend on cybersecurity next year in anticipation of incoming regulation.
Implementation of MiFID II – the revised Markets in Financial Instruments Directive – is relevant to UK managers because they need to avoid falling foul of localised private placement rules, Duff & Phelps said. Many UK investment managers are looking at a MiFID licence as a necessity when engaging with the sales process in Europe, but “clearly many will not meet the MiFID requirements in time”.
Korek said “skyrocketing costs” meant firms have had to decide which regulations to prioritise, meaning that some will miss the already extended MiFID II deadline as spending moves from just financial regulation compliance, towards cyber security.
“More guidance is needed from the regulator about how firms should allocate their time and money when complying with regulation, especially as the cost of Brexit, changes in US policy and cybercrime continue to emerge.”
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