Outsourcing lags in dash for MiFID

Investment banks have been warned they need to look carefully at their outsourcing agreements if they are to comply with the upcoming MiFID regulations.

Financial companies have been advised to consider how existing and future outsourcing agreements will work with the European trading directive by City law firm, Field Fisher Waterhouse (FFW).

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Simon Briskman, partner in the technology and outsourcing group at FFW, said that with banks pouring billions of pounds into other critical areas, outsourcing has taken a back seat.

He said: "It [the outsourcing issue] might have crept up on people unexpectedly."

Outsourcing operations will require the same level of compliance as internal ones and so contracts will need to take into account issues such as improved record keeping and the provision of the most appropriate services.

Briskman said that although existing outsourcing contracts will have to be renegotiated this shouldn't be too hard in practice.

He warned that, with the current "dash" for MiFID compliance, if businesses don't act now they may find themselves "backed into a corner" when negotiating with suppliers.

Regarding how prepared companies are likely to be by 1 November, Briskman said: "It's going to be a tough call."

FFW has launched an online service for enterprises to check their outsourcing agreements against the requirements of MiFID.