MIFID’s technological impacts: A feed-back from MiFID Forum France (M2F)

1. MIFID’s technological impacts: A feed-back from MiFID Forum France (M2F) Emmanuel de Fournoux, AFEI Head of market infrastructures and prudential regulation Investance 29 September 2006 1

2. Agenda • M2F: why and what for? • M2F: organisation • M2F: first results • M2F: next steps

3. 1. M2F: why and what for?

4. 1. M2F: why and what for? 10 months ago • In Paris • Except some “happy few” (professional associations, regulators, treasury, lawyers and compliance officers in banks and investment firms), people where not really aware of the impacts of the MIFID in terms of organisation and information technology. • A strong mobilisation to obtain the “best” regulation at Level 1, Level 2 and local implementation. • A lack of concrete mobilisation within banks and investment firms

5. 1. M2F: why and what for? 10 months ago • In London • Creation of the MiFID Joint Working Group in April 2005 • Creation of MiFID Connect: “you may not survive MIFID” • Numerous MiFID’s conferences • Some people consider that MiFID is as big as “Y2K” in terms of IT consequences

6. 1. M2F: why and what for? 6 months ago • In Paris • AFEI together with others trade associations, market infrastructure and with some IT providers and data vendors considered that there was a need to work on the “concrete” implementation of MIFID in Paris. • It led, in June 2006, to the creation of M2F whose main goals are: • To work on common technical and IT subjects related to the implementation of MIFID in order to make concrete recommendations • To disseminate the recommendations to the French marketplace • To share our analysis with others European countries and regulators

7. 2. M2F: organisation

8. 2. M2F: organisation Who? Today: 190 people are registered in M2F • « Every body » involved with MIFID, i.e. • Associations: AFEI, FBF, AFG, AFTI, FDVA, Cossium…… • Banks, investment firms and asset managers • IT and system providers: AEMS, GL Trades, SLIB, SUN, IBM……. • Data Vendors: Reuters, Thomson Financial, Fininfo, Telekurs…… • Market infrastructure: Euronext, LCH-Clearnet, Euroclear, ITG… • Standardisation bodies: CFONB… • Consultants.

9. 2. M2F: organisation Organisation • A Steering Committee • Currently the steering committee comprises 26 people representative of the main actors in Paris: professional associations, Markets infrastructures, IT providers, data vendors and consultants. • Three working groups • Market and Reference data • Order Flow • International cooperation • More than ten “task forces” created by the working groups

10. 2. M2F: organisation • Secretariat • The secretariat of M2F is provided by OTC-Conseil

11. 2. M2F: organisation Communication • All documents are available on AFEI’s public web site: www.afei.com(/groupes et projets) • IBM provides M2F members with a system (Quick place) which allows communication, exchange of documents between the members of the working groups (in test) • M2F will publish in the coming days technical papers which will comprise: • Gap analysis between current and MiFID situation • Questions raised by the implementation of MiFID • Main technical impacts for the industry • M2F Recommendations

12. 2. M2F: organisation With who? • M2F will share its views with others organisations/associations in Europe in order to achieve consistency in the implementation of MIFID • MIFID groups • Mifid joint working group UK, Deutschland, …..? • Mifid Connect • Professional associations in Europe • Apcims (UK), LIBA (UK), FOA (UK), bwf-verband (Germany), Assosim (Italy), Febelfin (Belgium), REB (Netherlands), APC (Portugal), SSDA (Suede) • ………

13. 3. M2F: first results

14. 3. M2F: first results • Transactions reporting to regulators • Gap analysis between AMF et MiFID rules • What has to be suppressed in the AMF rules (repo, lending and borrowing) • What has to be added in the AMF rules (reporting for European Financial Instruments) • Is there a need to maintain reporting for RTO? • Need to have the new format of data 6 month before November 2007 • Need to encourage cooperation between regulators in order to avoid burdensome reporting for investment firms. • Identification of execution venues • Use of the MIC code to identify execution venues (Regulated markets, MTFs and systematic internalisers) • Identification of the markets operated by Euronext (yet to come) • Transmission of the MIC code between market participants

15. 3. M2F: first results • Identification of business entities • Use of the BIC code rather than IBEI code which won’t be available by November 2007 • Identification of Financial instruments • Use of the ISO 10962 codification

16. 3. M2F: first results Example of M2F recommandations

17. 4. M2F: next steps

18. 4. M2F: next steps • Work on other technical subjects • Pre and post trade transparency • Storage of data • Best execution • Identification of customers • Consolidation of data • ….. • Share M2F views with others countries • Follow CESR’s level 3 working program • General meeting of M2F in Paris on October 19 • Participation in the MiFID JWG Conference in London in November

19. To JoinM2F www.afei.com edefournoux@afei.com jbprevoteau@otc-conseil.fr