Managing compliance risk after MiFID Paola Musile Tanzi Business and Law Department, Perugia University, Perugia, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy Giampaolo Gabbi Department of Business and Social Studies, Siena University, Siena, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy Daniele Previati Business and Law Department, Roma Tre University, Rome, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy, and Paola Schwizer Department of Economics, Parma University, Parma, Italy and Banking and Insurance Department, SDA Bocconi School of Management, Milan, Italy Abstract Purpose – The purpose of this paper is to focus on changes in the compliance function within major European banks and other financial intermediaries and on the effects of Markets in Financial Instruments Directive (MiFID) implementation. Design/methodology/approach – The four areas of research seek to answer the following questions: Is the positioning of the compliance function “at the top” of the organizational structure? Are the roles attributed to the compliance function, their knowledge and their instruments consistent with their responsibilities? Do the methodologies applied follow a qualitative and/or a quantitative approach? Is the interaction between the compliance function inside and outside the structure appropriate to the goals of compliance? In total, 31 top international groups based in Europe were invited to take part in the research, 16 of them accepted. Findings – The authors observed a resolute adjustment to the regulations in terms of macrostructure and high levels of compliance function competences in investment services and business knowledge, with a low variation. The encouraging news coming out of the results of the research is the confirmation of the presence of a connection between the compliance function and both the system of values and of incentives. Originality/value – The paper’s international sample offers a unique opportunity to highlight the critical areas of the compliance function within international groups, with growing operational complexity in a framework of principle-based regulation. Keywords Compliance, Regulation, Governance, Compliance risk, Compliance function. Internal governance, MiFID Paper type Research paper The current issue and full text archive of this journal is available at www.emeraldinsight.com/1358-1988.htm JEL classification – G2 Managing compliance risk after MiFID 51 Journal of Financial Regulation and Compliance Vol. 21 No. 1, 2013 pp. 51-68 q Emerald Group Publishing Limited 1358-1988 DOI 10.1108/13581981311297821