Increased demand for compliance experts amid MiFID II arrival

Recruitment in the financial compliance sector is increasing, as the introduction of an amendment to the Markets in Financial Instruments Directive – to be known as MiFID II – draws ever nearer.

At Barclay Simpson, we recently published our 2016 Compliance Market Report, which found that 88 per cent of financial compliance departments are planning to recruit new staff externally over the coming 12 months.

However, 79 per cent of the companies we questioned said they had faced difficulties when searching for employees with the compliance expertise they required.

But with the introduction of MiFID II coming in under a year’s time, it is vital that compliance workers are brushing up on their knowledge to enable themselves to benefit from the increasing number of vacancies that banks and other financial institutions will be advertising as a result.

What is MiFID II?

The current Markets in Financial Instruments Directive was established in 2007 and was originally designed to make sure that financial trading was operated in an organised manner following the European economic crisis in the mid-2000s.

Shares, bonds, derivatives and units in collaborative investment schemes are all categorised as financial instruments, with MiFID informing the investment intermediaries that provide services relating to each of these.

Over the last decade, as the EU’s economy has steadily recovered from the recession, the original purpose of MiFID has become somewhat redundant, and is subsequently being revised to ensure it continues to serve Europe’s banks in light of changing financial situations. In addition, the amendment will strengthen the level of protection available to investors.

These changes were proposed in 2014, and were initially set to be introduced in January 2017. However, the European Securities and Markets Authority (ESMA) has pushed this back a further two years, meaning MiFID II will now only apply from January 3rd 2018.

This delay was somewhat expected, with several voices in the financial industry calling for a postponement due to the lack of clear clauses for the amendment, while firms also wanted longer to update their internal systems to ensure they would be complying with the altered directive.

Announcing the delay, Jonathan Hill, commissioner for financial services at the Financial Stability and Capital Markets Union, stated: “Given the complexity of the technical challenges highlighted by ESMA, it makes sense to extend the deadline for MiFID II. We will therefore give people another year to prepare properly and make the necessary changes to their systems.

“Meanwhile, we are pressing ahead with the level II legislation to implement MiFID II and expect to announce those measures shortly.”

How this impacts recruitment

Until a few weeks ago, the majority of financial companies believed they had just 12 months to expand their compliance departments to be able to cope with the changes brought in as a result of MiFID II. As we at Barclay Simpson found, this was one of the factors that led to an increase in hiring intentions over the last six months.

However, following the announcement of the delay, some may be concerned that these recruitment plans will be put on hold for perhaps another year, if not longer.

Firms should use this extra time to make sure they are recruiting individuals who are the right fit for their company, not just in terms of compliance knowledge and expertise, but also with regard to their corporate culture.

What’s more, the delay provides businesses with the opportunity to ensure their internal systems are fully up-to-date and compliant with the MiFID changes, allowing them to mitigate their risk profile over the long term.

Our Market Reports combine our review of the prevailing conditions in the compliance recruitment market with the results of our latest employer survey.