About one in five firms admit that they will meet MiFID II’s January 3, 2018, deadline, according to a recent poll conducted by cloud-based eFX platform provider Integral.

Of the more than 280 institutions that answered a MiFID II preparedness question during a webinar, 18% said they had completed their preparations, and 33% responded that their firms were halfway to meeting the pending deadline. Another 40% of those polled state that they have started making the necessary changes to their infrastructure and workflow, but have a long way to go before completing those changes. Only 10% said that they had not started preparing for MiFID II and do not know how they will comply.

Harpal Sandhu, CEO of Integral, cautioned not to correlate the state of MiFID II preparedness with the size of the firm.

“We expected the smaller firms that do not have big IT budgets to have scheduling and implementation issues,” he told Markets Media. “We did not expect and were naturally surprised that some of the larger firms are scrambling with this in November and December to get to January 3.”

With so many firms ill-prepared to meet their MiFID II mandate, Sandhu expects a noticeable, but not totally, disruption in the FX market as 10 to 20% of market participants affected by the regulation step away from providing workflows and services to their FX clients until their firms become compliant.

However, he anticipates that the regulators will provide non-compliant firms with some breathing room to meet their regulatory obligations in an expedited fashion.

“If they do not make it on January 3, maybe they will make it February 3, or March 3,” said Sandhu.

However, firms should not count on infinite patience from regulators since firms have had the past 18 to 24 months to prepare without additional pressure.

“Now they are going to be under pressure to get everything done by the end of the second quarter or regulators might tell them that they can no longer operate until they have things corrected or face significant fines,” he noted.

Firms caught unprepared have a few options the can pursue to meet their obligations, according to Sandhu.

They can restructure their business, outsource activities to other firms, adopt hosted platforms or, in the case of FX, start trading on the multilateral trading facilities.

“The MTFs will handle capturing the data and report the trade as well as guarantee best execution as part of their services,” he added.