When MiFID was introduced a number of years ago most financial institutions focussed heavily on what the FSA describe as Conduct of Business rules.  There was widespread acceptance that there would be an impact on outsourcing and indeed shared services Service Level Agreements – but the changes necessary were not always made with the level of rigour expected by the FSA.  These organistions are now reviewing their internal and external SLAs in order to ensure that they meet required levels of details.

There are some sample MIFID SLA templates available.  In general the standard required is that which common sense would dictate when you are creating SLAs for Shared Services or outsourcing.  I suppose the real area of interest is that SLAs should be in place between group companies.  Whilst some of the provisions or the interpretation thereof might seem zealous, the truth is that the European Regulators are taking action to ensure good governance and risk management is in place in all aspects of sourcing in Financial Services.  Given recent history you have to feel that maybe this is a good thing.

Recent activities by the Regulators would suggest that active management of Service Level Agreements is required for MiFID SLAs.  It is not enough to write them and put them in your drawer or filing cabinet.  Think about how you will demonstrate to the Regulator that you are actively managing them….this my require an audit trail around the service level management process in place in your organisation.  Historically this has been difficult to establish – traditional SLA Management tools have been difficult to deploy and expensive.  However there are next generation SLA management tools which can be deployed quickly and easily – with the set up experience much more akin to setting up a spreadsheet than installing a ’system’ – thankfully the user experience is much better than spreadsheets!