And now things are about to get even more challenging for financial services providers, with the countdown beginning to the (formal) introduction of Mifid II regulations in January 2018.

Why is Mifid II such a big deal? Quite simply, it is because the regulations are the most extensive the financial services sector has seen in some time. The scale of its requirements are staggering and require industry participants to undertake a huge amount of work to meet the standards Mifid II sets, including the introduction of new business practices and improvements to existing functions.

At this point, I suspect most people will be familiar with specific elements of the incoming regulations; for those that aren’t, a recent FTfm article provides a helpful summary of individual Mifid II requirements.

The numbers associated with Mifid II are staggering. Data (referenced in FTfm’s article) shows the total cost to the financial services industry will exceed €2.5 billion, with the largest asset management businesses likely to each spend €10.3 million each to meet the new regulatory standards.

It is not just service providers that will be affected – a recent State Street article noted a 2016 survey where 77% of pension schemes feel they don’t have the necessary operational infrastructure to accommodate changes like the introduction of new or revised regulations. By implication, expenditure would therefore be needed to bring these schemes up to the required standard.

This, by the way, is certainly not to say there is no merit to the Mifid II regulations – an end to commission payments, a greater focus on execution best practice and increased investor protection are all highly laudable goals.

At a practical implementation level however, it would appear that the requirements of Mifid II are far from perfect and it remains to be seen whether it is genuinely viable for the financial services industry to meet all these requirements in one go. This is particularly the case for smaller providers, who will inevitably feel the effects more relative to their larger peers, potentially increasing pressure on these businesses at a time when many are already under significant stress.

Time will tell and it can only be hoped that Mifid II proves a success. However, the danger of this as an example of “over-regulation” can’t be ignored.