Financial services regulatory practice

The evolving challenges of compliance and regulatory risk management are providing significant hurdles for financial services organisations. They have, however, become as much of a competitive as a compliance imperative, playing an important role in moving performance forward by strengthening processes and protecting the reputation of the company.

In Belgium, we have a dedicated team of regulatory compliance specialists offering pro-active regulatory advice on areas such as obtaining regulatory authorisation, interpretation of regulatory rules, developing codes of conduct, understanding prudential supervision, and meeting regulators' requirements.

Our multi-skilled specialists, who are part of a global team of over 350 people, also engage with the wider network of experts within PricewaterhouseCoopers to provide support on all compliance and regulatory issues facing the financial services industry. Some of the issues on which we are currently working with clients include:

• Markets in Financial Instruments Directive (MiFID)
• Capital - Basel II/Solvency II

Markets in Financial Instruments Directive (MiFID)

MiFID, which came into force in November 2007, is the cornerstone of the EU’s strategy to create pan-European capital markets. In replacing the Investment Services Directive, MiFID does not only introduce changes to the existing regulatory environment across the EU, but also encompass products and asset classes that have not been subject to regulation before including derivatives.

MiFID’s 73 articles cover a wide range of systems, information and client relationship provisions including best execution, investment advice, client suitability, information about financial instruments and safeguards against conflicts of interest. In practice, compliance to requires a thorough review and upgrade of systems, training, record keeping, marketing materials and agreements with customers.

On a strategic level, MiFID enables investment businesses to operate across different European jurisdictions while being governed by a single home regulator. The directive also makes it easier and more cost-effective for larger organisations or groups of companies to conduct proprietary trades outside exchanges. For investors, MiFID offers greater transparency, more choice of markets, consistent protection around Europe and potentially lower margins.

How PwC can help

PwC has the expertise to help companies implement MiFID and embed its requirements into information systems and customer relationship management. It can also help companies to address the business opportunities and challenges of MiFID in areas such as governance, process improvement and business model review/re-orientation.

Capital - Basel II/Solvency II and individual and group capital requirements

The revised Basel Capital Framework (Basel II), which was issued in June 2004, has been implemented in the EU through the Capital Requirements Directive. Many financial institutions have been working on the necessary systems and process changes.