Industry players unite for MiFID II implementation with Project Sentinel
Project Sentinel, a collaborative initiative by a group of banks to mutualise the cost of MiFID II implementation in the OTC front office, has announced the creation of a normalised regulatory data model that assists investment firms to meet their MiFID II OTC sales and trading requirements.
Etrading Software, which has the project management office (PMO) role at Sentinel, says that dealing with MiFID requires substantial human resources, expertise and technology investment – which, if tackled on “an institution by institution basis, will demand substantial investment in areas that provide limited or no competitive advantage”.
Hence, the aim of Project Sentinel is to enable market participants to pool resources with their peer group in the non-competitive areas, such as MiFID II, by investing in a standards-based, strategic MiFID II compliant technology solution. This solution, explains Etrading, “streamlines and automates the business processes for the front-office, brings value and efficiency back to the business and reduces commercial risk”.
The collaborative initiative focuses on:
- reducing costs and risks through the mutualisation of analysis, interpretation and implementation;
- reducing compliance costs thanks to sharing of costs of IT investment;
- economies of scale to create a competitive, market-leading, “best-in-class”solution;
- ensuring dedicated, focused resources working on a single project;
- consistent interpretation of MiFID II across participating institutions;
- creating a flexible solution that can be adapted to other regulatory regimes such as EMIR and Dodd-Frank.
The next phase of Project Sentinel is mapping out the MiFID II compliant workflows for the core variations of:
- interaction types;
- client types;
- trading models;
- venue types;
- instruments across the trading lifecycle.
This will then lead to the selection of best-of-breed technology solutions – buy or build – for the new market structure to come, says Etrading.