Major regulatory changes become the norm for Europe

Mark Astbury 14.09.2016

In the last year, we have seen new rules come into effect across the continent covering areas from corporate reporting to accounting and market abuse. Then of course, there is MiFID II (who could forget).

The far-reaching legislation is predicted to cause a major shake-up. The UK’s vote to leave the European Union (EU), meanwhile, has created further uncertainty with equivalency rules. Below, I round up the latest Europe-wide regulatory changes affecting banking institutions and in turn, how this is likely to affect recruitment trends over the next 12 months.

Markets in Financial Instruments Directive (MiFID II)
The second instalment of the Markets in Financial Instruments Directive (MiFID II) has suffered from delays – the implementation date was postponed by 12 months to January 2018 – but it is already having a major impact as market participants gear up for the changes. Although hiring within 2016 has been steady within the MiFID II space, we have not seen the volume that we expected at the back of 2015. The market is signalling to us that 2017 will be busier within this space, as we head towards implementation. This is a consistent theme across IB and Asset Management.

Alternative performance measures 
In July 2016, the European Securities and Markets Authority (ESMA) brought in new guidelines on alternative performance measures (APMs), which are financial indicators provided in addition to traditional IFRS earnings figures. The aim of the new guidelines is to promote the transparency and usefulness of APMs. According to ESMA, amid worries they could be used to disguise true financial performance, APMs need to be disclosed and reported properly, and so people can reconcile them and decide if they want to make any adjustments. This can only have a positive effect on the recruitment market, as new measures leads to demand for specialist skill sets.

New market abuse rules
Within July 2016 we also saw the EU introducing new requirements under its Market Abuse Regulation, covering areas such as disclosure of insider information, insider lists and senior managers’ dealings. For larger companies the changes are an evolution of existing rules. For smaller companies, however, the changes may be more substantial, with rules now applying to multilateral trading facilities such as the UK’s Alternative Investment Market. Now MAR has been implemented, we expect these teams to be moved across to MiFID II and other regulatory programmes.

End of mandatory quarterly reporting
Last November, Europe ended the requirement for listed companies to report financial information four times a year. The specific impact of this change depends on which country you operate in, however. In some markets, like Germany and Austria, larger companies will need to continue quarterly reporting (although a drastically shortened version is now allowed) because it is still a requirement of the prime segment of the main stock exchange. Organisations may now find that headcount within this area can be reduced. Unfortunately, an ease in pressure may lead to a reduction in staff.

MiFID II and Regulation Change in general continues to lead the way for hiring within 2016 and is set to be the hot topic for 2017. We have seen an increase in demand for Business Analysts and Project Managers to work across both all work streams within Investment Banking, Asset Management and Investment Management. Although summer has caused a slight delay, we expect September and October to be busy. MiFID II Programme Leads have suggested that 2017 will be active within this market. As result, if you are an experienced Regulatory Change professional and you are considering a new role, please reach out to myself and the Morgan McKinley team for a confidential conversation.

Mark Astbury's picture
Associate Director
mastbury@morganmckinley.co.uk