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Apr 04, 2018

Consultant offers Mifid II-readiness checklist for IR teams

Warns against a ‘wait and see’ approach

A leading IR consultant, noting what she sees as a worrying lack of focus by the IR profession in addressing the challenges posed by Mifid II, has offered a checklist for assessing whether teams are ready.

Marina Zakharova de Calero, CEO of London-based Conduit Communications, tells IR Magazine: ‘Many companies we meet have adopted a wait and see approach as a coping mechanism post-Mifid II. There is nothing wrong with this approach - providing it is a deliberate decision by the IR team and the board following the initial assessment of the potential impact.’

For example, Zakharova de Calero lists a number of prerequisites that should be addressed in order to consider the directive’s impact, such as whether the IR team:

  • Has reasonable clarity on the frequency, depth and quantity of sell-side stock coverage
  • Has solid relationships with the top-20 shareholders
  • Is clear on business capital requirements
  • Has a defined list of potential targets to meet over the coming month
  • Has had conversations with corporate brokers to test the waters
  • Has discussed how the corporate access element will be run
  • Does not anticipate changes to guidance and is comfortable with the current expectations management practices.

However, if, Zakharova de Calero observes, a 'wait and see approach is used as a delaying tactic to face the elephant in the room, while keeping busy with the usual day-to-day IR work, then there is a real threat of being faced with a much higher mountain to climb later in the year – as analysts streamline their coverage, investors engage with your competitors and brokers become less active in pushing your proposition.’

The key reality is that Mifid II is here to stay, she says. ‘The market is changing and the change will impact every listed company – but at different times and in different ways. It is up to IROs to make the assessment of its impact on their IR program and then decide if they can afford to wait, or it is best to take actions sooner.’