JWG-IT MiFID TechSIG model applauded by investment firms as critical gaps remain days away from implementation

from PJ Di Giammarino of JWG-IT: The Financial Serivces industry think-tank

Industry has the potential to save EUR millions through a new approach

London – July 2007. JWG-IT Group Limited, the think-tank for EU-driven IT change in financial services, is pleased to announce that the JWG-IT TechSIG, assembled from the market’s leading technology suppliers, is seeing early success in its development of technology architectures which meet regulatory and market needs. There are less than 50 work days until 31 countries have to be tested and ready for the Markets in Financial Instruments Directive. Through capitalising on TechSIG’s collaborative approach, the industry stands to save millions of euros by using pre-defined flat pack solutions for complex infrastructures.

Significant customer and regulatory pressures sparked by MiFID will mean those that are not ready will risk losing customers and incurring significant fines in 2008. According to a research report, “Who’s ready for MiFID?”, which Thomson IFR published earlier this week, the TechSIG is addressing 90% of firms’ top issues by developing reference architectures for:

• Doing the trade right (DTR)
• Reporting the trade correctly (RTC)
• Storing and retrieving records (SRR)

68% of firms surveyed predict the first challenges to their best execution will come in the first quarter of 2008 and expect that regulatory fines across the market will total €50 million by the end of the year as the regulators have no alternative but to impose penalties for breach of the law, according to 73 respondents from financial institutions across Europe.

Phil Higgins of Brookcourt Solutions commented “We are building a common understanding of people, process and technical options which apply to ALL divisions of the bank. This level-setting helps technologists identify issues and present their investment case to senior managers who need to understand how technology can also be a business benefit.”

TechSIG is now leveraging 19 months of JWG-IT research to lay new foundations for a pioneering form of collaborative working. Members are using diagnostic tools, models and reference architectures to focus and truncate complex discussions about what is required to fill key gaps. A seminar, held recently in London with technologists from Tier 1 and 2 firms, reviewed the architectures and, in a blind survey, participants awarded 3 out of 5 for overall approach, with 66% expressing an interest in working with the group on the detail.

“The smart investment firms have realised MiFID presents massive infrastructure challenges. The new data and security challenges are complex, real and go far beyond the high profile topics. We are addressing immediate and long term needs,” commented Parm Sangha of Cisco and Vice Chair of TechSIG.

The group has now achieved a critical mass, having doubled its membership to 22 in the last 2 months, and it continues to bring in leading players. “TechSIG is working because the members know that it will provide customers with more efficient and effective technology choices. Our first seminar was a small but important step in a long journey, as it confirmed that we are focusing on the right topics with the right model”, said Nigel Woodward of Intel and Chair of TechSIG, who added, “Our next step is to detail the architectures and start testing the logical prototypes. It is now starting to get very exciting - watch this space!” To support the TechSIG workstreams, leading testing companies are now preparing test assets which support their architectures.

PJ Di Giammarino, CEO JWG-IT, concluded, “The industry runs a serious risk of panicking and flushing cash down the IT toilet by making sub-optimal MiFID resource decisions. It is great to see new levels of common sense from traditional technology competitors who are now working together to get ahead of the curve and help their customers. Their efforts are setting a new standard for the technology vendor marketplace.”

For further details about TechSIG or JWG-IT, please see www.jwg-it.eu, which has over 500 members of the financial community registered to receive updates and alerts.