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Monday 25 September 2017

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AIMA explains practical implementation of MiFID2 with Best Execution Guide

Written by Talya Misiri
14/07/17

The Alternative Investment Management Association (AIMA) has published a MiFID2 Best Execution Guide to take a practical view of the implementation of Directive’s requirements.

The guide is for alternative investment managers and aims to assist them in understanding and implementing the “best execution” obligations under the EU’s updated MiFID2, which will take effect in January 2018.

AIMA’s guide also draws on good and poor practices highlighted by the FCA in their supervisory and thematic work in the last few years and outlines the MiFID2 obligation to achieve the best possible results when completing transactions.

It outlines the practical considerations that firms will need to prepare for to ensure that they are ready for the MiFID2 deadline and to maintain continued compliance. AIMA states that: “In order to meet the new requirements, firms will likely need to review their execution policies and client disclosures (such as Investment Management Agreements) to ensure they meet the higher standards under MiFID2. Fund managers also will be required to publish annual reports about their choice of trading venues and brokers.”

The guide was developed by AIMA alongside a working group of members, and chaired by Dechert LLP. The law firm also sponsored the guide.

AIMA’s CEO Jack Inglis said: “The new best execution obligations under MiFID2 continue to be a key focus for our members as they work towards January 2018. We hope that our comprehensive guide will support them in their implementation programmes. Our recent MiFID2 survey indicated that some of our members with an international presence are setting the MiFID2 best execution requirements as their global standard. This makes it all the more important to get it right from the start.”

Dechert LLP partner Dick Frase, added: “New best execution obligations are a major part of the MiFID market reforms and will have a very significant impact on business practices.

This is the latest in a series of MiFID2 guides published by AIMA, following its MiFID2 Guide for Investment Managers and a MiFID Vendor List earlier this year. In addition, the firm published findings from a survey of investment managers’ MiFID2 preparedness in June.



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