The FSA is calling on senior management at regulated firms to begin preparations for implementing the EU's Markets in Financial Instruments Directive (MiFID). The much debated and maligned Directive had originally been delayed for implementation until April 2007, but following pressure on the European Commission from the UK and other industry bodies, a further delay is expected until November 2007.

MiFID will have a significant impact on financial services regulation and how firms operate and interact with customers. To support their call for firms to begin preparations, the FSA has issued a guide, 'Planning for MiFID', which highlights the key areas and practical implications of the Directive, such as conduct of business and systems and controls requirements.

In a press statement, Hector Sants, FSA Managing Director for Wholesale Business, said, "The introduction of MiFID will affect most FSA-regulated firms carrying on investment business, whether or not that business falls within MiFID's scope. The implementation of the Directive is a major challenge, both for the FSA and the industry and, while November 2007 may seem a long way off, preparing to meet the challenge cannot begin soon enough."

The challenge to begin preparations comes on the back of a recent survey which reported over three-quarters of respondents as saying their organisation either does not have a MiFID compliance framework in place or if it did, they did not know about it.

Whilst the likely delay until November 2007 will be welcomed, it seems unlikely that this latest postponement will deflect the criticism levelled at MIFID as being too cumbersome and complex. This is highlighted by the fact that significant aspects of the MiFID package have yet to be agreed at European level. Consequently, HM Treasury and the FSA will only be able to consult on the UK implementation of the Directive, when the final details are published. They have scheduled to issue a consultation paper on MiFID in March 2006.

The guide, 'Planning for MiFID' is available on the FSA website.