So you survived MiFID Day, and indeed the first MiFID week; survived the incessant MiFID blogs and weeklong MiFID press coverage, History of MiFID, MiFID in numbers, and special features on MIFID from special MiFID personalities some of whom we had never heard of before. You have ticked the MiFID box at least once, in fact, probably at least once per client... who then sent you their own MiFID terms, asking you to reconfirm ... you know the story. You have managed to find some of your trade reports roughly where you expected them to be, although not all data has been visible from the expected data vendors. An example of trade reporting confusion as well as fragmentation. You are confident that major MiFID facilitated liquidity fragmentation is a late 2008 problem now with Project Turquoise being dubbed Project Tortoise. Having said all that, if you felt MiFID went well at your firm, you have booked the MiFID celebration party, confirmed that winter sun break in place of your long postponed summer holidays and are now looking forward to winding down the MiFID programme, taking a bit of time to relax and move onto other things...

 ... or maybe not quite. You still have some nagging doubts that although the compliance box has been ticked, there is more to be done. I am not talking about the armchair pundits high-level “market has undergone a structural change” or “the balance has shifted” type things. These will start to happen during 2008, but not in a single initiative, big bang sort of way. No, the nagging doubts are that some of the items you discovered as you did the “hard yards” of implementation have not been fully addressed by the compliance tick in the box. From a mix of implementation work, discussions with market participants and some straight forward analysis here are my thoughts on what should be on the post MiFID clean up list if institutions are to avoid a heavy MiFID hangover.

• Watch out for the hidden specific instructions. Like me you may have read rather more order execution policies than you wanted over the past month. Many of which refer to the impact of specific instructions. Specific instructions are where a client restricts a brokers choice of venue or way in which the trade can be executed and hence restricts the degrees of freedom a broker has to provide 'best execution'.  Few policies go into much depth as to what consitutes an instruction, with the assumption that they will normally be given explicity at the time of the order. However, there may be hidden/implicit 'specific instructions' lurking in the way you currently do business. Take a simple fix order for example where you send an order to buy Vodafone identified by its RIC code VOD.L. Do you know how each broker you may use would interpret this based on their MiFID policies? Some will interpret it loosely as wanting to buy Vodafone stock quoted in GBP on any exchange whilst others will keep to the strict definition that it must buy only the LSE line, and what about crossing? What are you doing to resolve this abiguity?  
• Tackle data and reporting costs – MiFID requires more market data coming in and more reporting going out. If you stick with your current arrangements, this probably means a significantly higher bill for both these areas. However, in the benefit column, the introduction of MiFID has facilitated competition between reporting venues e.g. transaction reporting in the UK which could make it worthwhile switching at least some reporting to the new alternatives.
• Dry run your best execution proof process – each year your company will practise a building evacuation as part of your health and safety drills just to make sure your staff know what to do in the event that a fire breaks out. Well my reasonably dead cert prediction is that you are far more likely to have a best execution challenge this year than have a major fire in your building. So it makes sense to properly dry run your "best ex" challenge process, even if it is nicely documented and sitting on your intranet. If it is not documented then it makes even more sense to do a realistic rehearsal and write it up as you do so. 
• Client/counterparty data – yes, that old chestnut, but having to contact and get consents from each client has probably taught you how volatile this supposed “static data” is. Rather than waste the efforts of your MiFID team to bring this data up to date, how about putting an improved process in place to manage it?
• and remember the fable... the tortoise beat the hare. Turquoise now has the basic building blocks in place and given the identity of Turquoise's backers it may still be possible for this venture to win the race. So best to hedge your bets by preparing your infrstructure beforehand so you can connect to whichever venues attract the liquidity over 2008 and beyond.

and finally do make sure to take that post MiFID winter break. If you worked on a MiFID project, you probably need it ... and also 2008 will be a busy year.