eNewsletter Autumn 2017
“While the European legislation, known as MiFID II, will pose significant challenges for fund managers, it will also force them to make changes to the way they conduct business that may ultimately benefit end investors. The change is long overdue”, according to the Financial Times.*
Further to this, it is the expectation that fund managers will be required to pay investment banks and brokers directly for analyst research. Price quality, settlement size, information relating to execution venue and financial instrument traded are measures that, among others, MiFID II’s new reporting requirements will cover. But it goes beyond this.
Buried within MiFID II is a regulatory desire to push more trading away from the phone and on to electronic venues, which comes with better audit and surveillance trails. This will mean a wave of data, likely to be measured in petabytes. Institutions will have to report more information about most trades immediately, including price and volume. Information must be stored for a minimum of five years for example, while banks and brokers will be forced to show customers that they were offered the best available price for their trades.
As mentioned in a number of studies and research material the objective of this regulation is to better safeguard the investor and make sure that investment firms have the tools in place to gather, analyse and process an investment transaction to the best interest of their client. Further to this, MiFID II is expected to impact KYC processes. In particular, it requires a more detailed or re-configured collection of client and counterparty data and documentation to segment clients and products based on the new rules.
Undoubtedly technology has evolved in many ways to provide investment officers with the options that would help them automate processes and comply with this regulation. This can be achieved with setting the suitable workflow up while ensuring seamless integration with other systems that feed data or deploying automated client onboarding procedures. Ultimately, the objective is to deliver the desired customer service experience that would differentiate their services (both in terms of regulations and in terms of competition).
With more than a quarter of a century experience in developing Wealth Management platforms, Profile Software supports the firms’ operations to become more agile, automated and to offer interactive client communication. Axia is the company’s omni-channel wealth management platform that effectively addresses the new challenges brought by MiFID II, while enabling advanced user experience.
Trademarks are property of the respective owner. *Requires subscription.