The mere mention of the Markets and Financial Instruments Directive (MiFID) strikes fear into the hearts of Government ministers, let alone financial institutions. But while banks and traders grapple with the massive compliance burden to be introduced by new EU regulations in November, few have stopped to consider the equally burdensome matter of their outsourcing arrangements.
While the Financial Services Authority has long required the institutions that it regulates to have outsourcing agreements, and has published best-practice guidelines, MiFID will go a lot further, according to outsourcing lawyers. The directive, which aims to streamline share-dealing regulations and boost competition across the continent, will cast its net wider and for the first time introduce mandatory obligations to the outsourcing world.
