Some sections of Europe’s financial services industry are being warned that they are under-prepared to handle the barrage of regulations—notably the biggest of them all, MiFID II—that are set to hit the region in the coming months and years.

Despite MiFID II, which promises a huge shift in the way financial markets operate in Europe, currently being held up in the European parliament due to political wrangling over what should and shouldn’t make the final cut, many firms are still unsure as to how much money they should allocate to a directive that is not likely to be implemented until 2015 at the earliest.

“Once MiFID II is implemented, there is likely to be more alterations required to the optimal workflow so it will be sensible to keep a bit of your IT spend back to accommodate that,” Paul Squires, head of trading at Axa Investment Managers in London, a French-headquartered buy-side institutional investor, told Markets Media.

A recent survey by London-based accountancy firm PwC suggests that just over half of all firms within the European financial services industry are considering MiFID II, or the revised Markets in Financial Instruments Directive to give it its full title, within the context of wider regulatory change. However, the report said that slightly less than half of the firms surveyed had put any budget aside to undertake some initial MiFID II activity this year.

“Despite the MiFID II deadlines being pushed back, it remains a key component of wider regulatory reform,” said Ullrich Hartmann, a financial services partner at PwC.

“A number of firms have already set up working groups and are raising internal awareness, conducting initial high level impact assessments and undertaking analysis of the potential scenarios of MiFID II outcomes. Financial services firms are right to act sooner in order to set their future strategy and develop related systems and processes to prepare their business for MiFID II. ”

The survey found that asset managers had appeared to have done less work on MiFID II compared to, say, broker dealers, who are likely to be affected more by the directive.

“Recognizing the importance of considering MiFID II within the broader landscape of regulatory reform should help firms manage their change programs in a more effective manner, compared to those who intend to deal with MiFID II in isolation,” said Hartmann.

“MiFID II is not just a compliance exercise. Given the magnitude of commercial and operational impacts, successful implementation will require early involvement of relevant business lines and key functions such as IT and operations.

“The deadline for MiFID II may have been pushed back, but acting now on MiFID II in the context of wider regulatory reform will help prevent firms from reacting too late to the market changes that will arise, losing profitability and surrendering market share to competitors.”