• Raymond Groen int Woud, Head of Product Distribution Oversight at KNEIP


• 02.02.2018 07:45 am
undisclosed

Nearly one month after the implementation of MiFIDII it is maybe time to draw the first practical conclusions. With the initial delay of the Directive to 03rd January 2018, it was expected that asset managers would have taken the delay of an additional year to be ready in time. However, what we actually observed was a sprint during the last few weeks of 2017 to have the Target Market information and Cost disclosures ready. Whereas the larger platforms and distributors had already communicated that Target Market information was needed prior to the year-end, many funds still saw no data available by early or mid-December.

Some asset managers, who decided to keep the process in-house, have actually seen a very busy second part of December and a first week of January. Many have identified, later on in the process, the difficulty of different standards and lay-outs and managing the many requests for dissemination to the distribution network and data vendors has proved more challenging than anticipated.  In addition, there has been an impact on non-EU domiciled products sold in the EU. Whilst many investors like the cost profile and performance of passive ETF products, for instance, many US based ETFs have not created a Target Market definition causing these products to “be taken off from platforms” and therefore the sales in these products have dropped. Overall I believe we will continue to see teething issues with regards to MiFID II for a short while.  While some distributors may have given asset managers the benefit of the doubt, if an asset manager is not able to be compliant with MiFID II they are likely to see a drop in sales as well as regulatory compliance issues.