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MiFID – best execution still a concern – and the Boat sails on

14 June 2007
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Best execution requirements under the EU's Markets in Financial Instruments Directive (MiFID) remain the "biggest piece of work" in firms' MiFID projects according to the MiFID mid-tier special interest group, the Financial Services Discussion Club, at their monthly meeting in London on June 4th.

The conditions stipulated under best execution were seen as the main challenge for firms, as members detailed the issues in putting appropriate policies together. There was particular concern about synchronising best execution policies between buy-side and sell-side firms. Many buy-side firms were waiting on information from sell-side counterparts in order to put best execution policies together and were concerned at the diminishing time-frame available to them before November this year to complete this part of the project. Traders' increased responsibility to document that best execution policies have been followed was also seen as a taxing issue.

Rob Nieves of KPMG who chaired the meeting said, "Best execution has been the most discussed area of MiFID since the directive was first proposed. Liaising between the buy-side and the sell-side and documenting policy adherence will require significant process changes and re-training across departments if this element of MiFID is to be successful."

Last week we also heard that Project Boat continues to go from strength to strength. It was announced that five major investment banks - Barclays Capital, BNP Paribas, Dresdner Kleinwort, JPMorgan and Royal Bank of Scotland – had selected Boat to meet their pre- and post-trade reporting obligations.

Boat was originally set up by a consortium of nine banks - ABN AMRO, Citigroup, Credit Suisse, Deutsche Bank, Goldman Sachs, HSBC, Merrill Lynch, Morgan Stanley and UBS – to take advantage of MiFID's opening up of the market and to create a trade data and market data dissemination platform which would compete with those services offered by the exchanges.

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