Best Execution: Are You Doing Enough? What Is the Regulator Saying?
The Cyprus Securities and Exchange Commission (CySEC) recently carried out a review of the arrangements put in place by Cyprus Investment Firms (CIFs) to ensure compliance with their best execution obligations or, in other words, their overall requirements to execute orders on terms most favorable to their clients. CySEC published its results in Circular 343. Following its findings, CySEC requests that all CIFs determine whether or not they comply with their best execution obligations and take the necessary corrective measures. Under MiFID I, Investment Firms (IFs) had to take “all reasonable steps” to obtain the best possible results for their clients. However, under MiFID II, IFs are required to take “all sufficient steps.” According to ESMA’s Q&A on MIFID II and MIFIR investor protection, this means that the requirement for “sufficient” steps sets a higher bar for compliance than “reasonable” steps. During its review, CySEC observed several weaknesses in the implementation and monitoring of order execution policies and arrangements. This review highlighted once more the importance of effective monitoring to identify best execution failures. Furthermore, CySEC established that the monitoring carried out by CIFs did not reflect all the execution factors and information the CIFs are required to assess. Among others, CySEC identified the following deficiencies: A lack of systematic comparison of the CIFs’ quoted and executed prices against the price offered by independent sources or other venues in order to ensure price fairness; A lack of use of benchmarks and statistics such as: i) average effective spread; ii) frequency of quote delays; iii) rejections and price re-quotes, and; iv) metrics on order latency that should play a fundamental role in the monitoring; In many cases, the monitoring did not include: i) slippage metrics taking into account the number of orders; ii) the volume of orders, and; iii) the value of orders for all order types (stop-loss and take-profit orders, other limit orders and stopped out orders due to margin closeout); Insufficient evidence to support that clients enjoyed lower costs (transaction fees, spreads and various other financing costs and charges), and; In some cases where a monitoring programme existed, said programme was lacking in quality and substance as it was carried out manually on spreadsheets often using wrong methodologies or inadequate sample sizes, and/or the programme did not take into account all the execution factors CIFs are required to assess. CySEC has praised CIFs that deployed sophisticated technology to support their monitoring program and ensure the fairness of execution. Many of these solutions were developed in-house by CIFs that invest heavily in IT, as well as by independent third parties, and they took into account the CIFs’ specific business model. Performing all necessary checks manually or deploying an in-house solution can be very challenging for IFs due to the strain it puts on human resources and costs. Furthermore, these solutions can be prone to errors and incorrect analysis and add additional operational hassle. Hence, it is important for IFs to consider deploying a tested, automatic and sophisticated technological solution from a trusted vendor. How can Complyport Tech assist you? Complyport Tech, a trusted technology provider to the financial services industry that specialises in regulatory technology solutions, offers a fully automated tool for Best Execution Monitoring. Compiyporttech’s platform not only satisfies the requirements of CySEC and MIFID II, but also offers a holistic view of your Best Execution provisions with more than 40 analytical checks applied on all execution components (price, cost, speed, likelihood and settlement, size, price continuity or any other consideration relevant to the order’s execution). Checks include number of orders, percentages, volumes, monetary values, types of orders, types of costs, and benchmarks such as average industry speed, quote delay tolerance, application of charges and more. In addition, the system offers the ability to view complex analytics, input comments, record monitoring and corrective measures, set alerts, and export reports for record-keeping, business and proof of compliance purposes. If you would like to receive more information about MAP-Best Execution Monitoring, please don’t hesitate to contact our team via email at info@complyporttech.com or give us a call at +357 2535 1335 or +44 207 060 5540.
What have we learned from ESMA’s recent peer review of EMIR’s derivative data?
Last week, the European Securities and Markets Authority (ESMA) published its findings for the peer review it conducted into the supervisory actions of six National Competent Authorities (NCAs). More specifically, this peer review studied their approach to enhance the quality of derivative data reported under the European Market Infrastructure Regulation (EMIR). ESMA expects NCAs to integrate an assessment and analysis of EMIR data quality into their overall supervisory approach. Specifically, NCAs are expected to: (i) develop an appropriate supervisory model based on their jurisdiction’s size, scale and complexity; (ii) ensure policies and procedures are in place to monitor EMIR data quality; (iii) take actions where applicable; (iv) be proactive in their supervisory approach, and; (v) perform a qualitative and probative supervision, not a tick-box exercise. Proactive supervision should include thematic reviews, onsite inspections and introducing an internal scoring mechanism, among others, in order to detect and check for data quality issues. Moreover, NCAs’ actions should focus on areas such as accuracy, completeness, consistency, timeliness and the non-duplication of reporting under EMIR, to list a few. Read ESMA’s full report here. In light of ESMA’s peer review findings and recommendations, we expect in the near future an increase in supervisory activity by NCAs regarding EMIR data quality. As such, regulated entities should undertake all necessary actions to ensure compliance with EMIR data reporting. Investment firms and other reporting entities need to enhance the quality of the data reported. This, in turn, increases the need for technological solutions to automate and manage EMIR reporting. By automating reporting, you can bring efficiency to your processes, significantly reduce errors, save time and resources, and confirm that you report and do so correctly. Complyport Tech can help your organization ensure quality data, benefit from automated reporting solutions, enjoy exceptional support, and rely on experts to keep up-to-date with developments and changes to the regulatory framework. Why Complyport Tech? Complyport Tech is a leading regulatory technology provider and member of MAP S.Platis Group that specialises in regulatory technology reporting solutions for MiFID II/MiFIR, ΕΜΙR, FATCA, CRS, Best Execution Reporting (RTS 27/28) and Monitoring, as well as the forthcoming SFTR. If you would like to receive more information about our products and services, please don’t hesitate to contact our team at info@complyporttech.com Please click here to view our latest brochure for more information about our Company and Services.
Vote for Complyport Tech at the Finance Magnates London Summit Awards 2019!
We are proud to announce that Complyport Tech one of Europe’s leading regulatory technology providers, is nominated for the category Best RegTech/Reporting Solution at the Finance Magnates London Summit Awards 2019! Voting is now open to all those registered to attend the Finance Magnates London Summit 2019. You can vote for Complyport Tech here First Voting Round: 21 October – 1 November. We would be grateful to have your support and we look forward to meeting you at the Summit! Come and meet our team at booth #D8
SFTR is coming: Are you aware of the new Reporting Framework and How to Comply?
What is the Securities Financing Transactions Regulation (SFTR)? In 2016, the EU introduced the SFTR as a response to the many risks posed by shadow banking and way of improving the transparency of Securities Financing Transactions (SFTs). SFTs provide market participants with the opportunity to access secured funding through the temporary exchange of their collateralised assets as a guarantee. Lending or borrowing securities and commodities, repurchase (repo) or reverse repurchase transactions (reverse repo) and buy-sell back or sell-buy back transactions, including collateral and liquidity swaps, are some typical examples of SFTs. The SFTR introduces, among others: a) a transaction reporting obligation in respect of securities financing transactions; b) an obligation to make prescribed pre-contractual disclosures to Undertaking for Collective Investment in Transferable Securities (UCITS) and Alternative Investment Funds (AIF) investors in respect of SFTs and total return swaps in the UCITS/AIF prospectus and annual return, and; c) provisions for minimum transparency requirements relating to the “re-use” of collateral (financial instruments only) under financial collateral agreements. The SFTR requires both financial and non-financial market participants to report details of their SFTs to an approved EU Trade Repository (TR). In order to align reporting standards to the maximum extent possible, the European Securities and Markets Authority (ESMA) has developed its reporting standards for SFTs building on its experience with the European Market Infrastructure Regulation (EMIR) and other EU-wide reporting regimes. What transactions must be reported? Repurchase transactions Securities or commodities lending and borrowing Buy-sell back and sell-buy back transactions Margin lending transactions Collateral swaps Liquidity swaps Modifications, collateral updates and valuations, margin valuations for CCP-cleared transactions, collateral reuse and margin lending funding sources Transaction terminations and positions for CCP-cleared SFTs, if opting to report modifications and collateral updates at the position-level The SFTR will require 155 fields to be populated, and reporting needs to take place by T+1 in most situations. Which firms will be affected? Broadly speaking, the SFTR applies to all EU financial and non-financial counterparties, including all branches irrespective of their location, as well as the EU branches of non-EU entities. Types of firms affected include: Credit institutions Investment firms Central Counterparty Clearing House (CCPs) Central Security Depository (CSDs) Insurance and reinsurance undertakings Pension funds UCITs management companies AIFs Large size non-financial counterparties How can Complyport Tech assist? Our expert team is working to prepare a comprehensive solution that will cover the needs of those clients who will be affected by the SFTR. With this in mind, we will share additional details in due course and once this service is officially launched. This new SFTR service will be offered under our successful Polaris Platform, in addition to the existing services for EMIR, MiFIR, CRS, FATCA, RTS27/28 and Best Execution Monitoring. Why Complyport Tech? Complyport Tech is a leading regulatory technology provider and member of MAP S.Platis Group that specialises in regulatory technology reporting solutions for MiFID II/MiFIR, ΕΜΙR, FATCA, CRS, RTS 27/28 and Best Execution Monitoring, as well as the forthcoming SFTR. If you would like to receive more information on SFTR reporting and how Complyport Tech can help your firm comply with its SFTR reporting obligations, please contact our RegTech expert team at info@complyporttech.com.
MAP-Best Execution Monitoring is now available!
Complyport Tech, a leading regulatory technology provider in Cyprus, is thrilled to announce the launch of its fully comprehensive and cost efficient regulatory technology solution, MAP-BEST EXECUTION MONITORING, available via the powerful “POLARIS” platform. Pursuant to Article 27 of MiFID II, investment firms should take “all sufficient steps to obtain, when executing an order, the best possible result for their clients taking into account price, costs, speed, likelihood of execution and settlement, size, nature or any other consideration relevant to the execution of the order.” To achieve this, investment firms should setup thorough monitoring systems that will regularly evaluate the actual execution quality delivered to clients. Why Complyport Tech? ΜΑΡ FinTech is a leading regulatory technology provider and member of MAP S.Platis Group specialising in regulatory technology reporting solutions, such as MiFID II/MiFIR, ΕΜΙR, FATCA, CRS, Best Execution Reporting (RTS 27/28) and Monitoring, as well as the forthcoming SFTR. If you would like to receive more information about MAP-Best Execution Monitoring, please don’t hesitate to contact our expert team at info@complyporttech.com
Missed the May 31st deadline for CRS & FATCA reporting?
Better late than never! Complyport Tech can fully support and assist with your CRS & FATCA reporting needs. Challenges: Analysis & Interpretation of the requirements with over 300 pages of guidelines to read More than 65 fields per record to complete Complicated multilevel XML files Different jurisdictions, different challenges Risks: Will you make it correctly? Can you afford the required resources? Will this disrupt your daily operations? Can you afford the consequences of non-compliance? How can Complyport Tech assist you? ΜΑΡ CRS/FATCA Reporting Service provides a user-friendly approach to receiving, validating, transforming and submitting the relevant information required under the CRS/FATCA reporting and due diligence rules. MAP CRS/FATCA Reporting Service: Supported by the specialised regulatory reporting teams of Complyport Tech Delivered via the powerful Polaris Reporting platform Automated XML conversion Automated submission to the HM Revenue and Customs Comprehensive fields guide package Why Complyport Tech? Complyport Tech is a leading regulatory technology provider and member of MAP S.Platis Group specialising in regulatory technology reporting solutions, such as MiFID II/MiFIR, ΕΜΙR, FATCA, CRS, Best Execution Reporting (RTS 27/28) and Monitoring, as well as the forthcoming SFTR. If you would like to receive more information about MAP-FATCA and MAP-CRS Reporting Services, or you need assistance with your CRS and FATCA reporting requirements, please don’t hesitate to contact our expert team at info@complyporttech.com.
Complyport Tech Breakfast 2019 – Wednesday 5 June 2019, Crowne Plaza Hotel, Limassol Cyprus
Complyport Tech Breakfast 2019 titled “Catching Up with CySEC’s and Other Regulators’ Recent Findings on EMIR/MiFIR Transaction Reporting and Best Execution” was successfully organised on Wednesday 5 June 2019, at the Crowne Plaza Hotel, in Limassol. Mrs Demetra Kalogerou, Chairwoman of the Cyprus Securities and Exchange Commission (CySEC), was the Keynote speaker at the event. During her speech, Mrs Kalogerou provided significant insights and guidelines based on CySEC’s recent findings in relation to EMIR and MiFIR Transaction Reporting and Best Execution. Mrs Kalogerou also stressed the importance of RegTech solutions in facilitating and automating compliance reporting and reaffirmed CySEC’s continuous support in financial innovation. More than 150 distinguished guests – professionals and executives across different areas of the financial industry including banks, investment firms, investment funds and fund managers – attended the event and had a unique opportunity for mingling and networking, while receiving insightful feedback regarding the recent findings on EMIR and MiFIR Transaction Reporting and Best Execution, as well as information on the main risks and weaknesses identified and on areas in need of improvement. Furthermore, participants had the chance to be informed about the industry’s best practices and Complyport Tech’s advanced regulatory reporting solutions, aiming at assisting them to comply with the relevant regulations. Complyport Tech is a leading regulatory technology provider and member of MAP S.Platis Group, specialising in regulatory technology solutions arising from the requirements of a number of complex and challenging international regulations such as MiFID II/MiFIR, ΕΜΙR, FATCA, CRS, Best Execution Reporting (RTS 27/28) and Monitoring, as well as the forthcoming SFTR. Learn more about Complyport Tech’s products and services at www.complyporttech.com or via email at info@complyporttech.com. You can view the photos of the event below.
Complyport Tech and oneZero announce partnership to collaborate in Research and Development
Complyport Tech and oneZero ANNOUNCE PARTNERSHIP TO COLLABORATE IN RESEARCH AND DEVELOPMENT FOR INTEGRATION OF THEIR SYSTEMS Partnership will focus on common areas of regulatory reporting relating to EMIR, MIFID II/MIFIR and Best Execution solutions MAP Financial Technologies Limited, (“Complyport Tech”) one of Europe’s leading regulatory technology providers to the financial services industry and oneZero Financial Systems (“oneZero”) a leading global wholesale enterprise trading solutions provider, are pleased to announce a research and development partnership that will focus on the integration of Complyport Tech’s reporting solution with oneZero’s Liquidity Hub. oneZero empowers all brokerages, prime brokers and banks to accelerate their growth to compete effectively in the foreign exchange, equities, commodities, cryptocurrency and futures markets. They deliver the most reliable connectivity, technology, infrastructure and market access through a globally compliant, liquidity-neutral multi-asset solution. Complyport tech is the Regulatory Technology arm of MAP S.Platis Group, a leading financial services advisory group in the EU. Complyport Tech has been a standard-setter in EMIR reporting for online brokers as well as one of the very first to have reported under EMIR on behalf of its clients. Since that time, Complyport Tech has focused on developing fully-automated MIFID-II/MIFIR, FATCA, CRS, Best Execution Reporting and Monitoring solutions to complement its unique and successful EMIR reporting solution. The advanced reconciliation, validation and monitoring capabilities of its Polaris platform make it a very useful tool for regulated entities. The respective emphasis of both oneZero and Complyport Tech on facilitating regulatory compliance through integration of their advanced technologies creates numerous advantages for clients such as the simplicity and speed during the on-boarding process, security, continuity and robustness of the reporting process, as well as cost effectiveness. The new joint partnership holds much promise both for current and prospective clients worldwide. Andrew Ralich, CEO of oneZero, said: “Amidst an evolving regulatory landscape, we are excited to partner withComplyport Tech. Building on oneZero’s leading technology, we are supported by one of Europe’s principal financial services advisory groups. Their principal services combined with oneZero’s industry leading data access utilities for brokers, will help our clients remain compliant and thrive amidst change.” Panayiotis Omirou, CEO of Complyport Tech, added: “We are very pleased to be working together with oneZero to co-develop essential tools for the financial services industry. Beyond our individual efforts to provide the tools for our respective clients to comply efficiently and economically with the onerous financial regulatory requirements, we hope that via this joint R&D, we shall create a competitive advantage for our clients”. About oneZero oneZero’s proven high-performance trading environment supports foreign exchange, commodities, cryptocurrency, equities and futures, with reliable IT infrastructure and technical support for institutions to seamlessly distribute their liquidity to other end-customers. oneZero’s Liquidity Hub is a highly customizable and scalable platform that enables clients to manage their trading book, customize liquidity pools and centrally manage risk and exposures across any size organization or business model. Over 200 market participants connect through oneZero’s EcoSystem for unparalleled distribution and access to unique flow. A hosted, SaaS model delivers connectivity to major financial exchanges, banks and other wholesale venues across four self-managed, highly stable and ultra-low latency data centers in New York, London, Tokyo and Hong Kong. oneZero is headquartered in Cambridge, Mass. For more information, visit www.onezero.com. oneZero Contact Michael Uttley media@onezero.com +1-617-326-8374 AboutComplyport Tech ΜΑΡ Financial Technologies Ltd (ΜΑΡ FinTech), is the technology arm of the leading EU financial services advisory and consultancy Group, MAP S.Platis.Complyport Tech is a long-trusted regulatory technology provider to the financial services industry with clients and associates worldwide. Complyport Tech technology enables its clients to meet complex financial sector regulatory obligations, such as EMIR, MiFID II/MiFIR, FATCA, CRS, where it includes effective and efficient solutions for Best Execution Monitoring and RTS 27/28 reporting. By utilising the firm’s proprietary technology, all reporting regimes go through one centralised fully automated processing machine, with a single, user-friendly web-interface portal, providing peace of mind and allowing clients to remain compliant at all times. The firm’s technology is supported continuously by a dedicated and specialised support team with emphasis on compliance and risk management. For more information, visit Complyport tech and MAP S.Platis. Complyport Tech Contact Costantinos Malialis cmalialis@complyport tech .com or info@complyport tech .com Cyprus: +357 2535 1335
Complyport Tech offers its expert opinion on SFTR
Complyport Tech was pleased to be invited by the UnaVista Trade Repository (through its Partner Programme) , amongst other leading RegTech firms, to share its expert opinion on the Securities Financing Transaction Regulation (SFTR). Alexandros Constantinou, Director of Complyport Tech, provided valuable insights in regards to the expected usage of the SFTR data by ESMA as part of UnaVista’s “SFTR FAQ guide: Insights from 10 experts” which aims to address key issues and to give answers to the most frequently asked questions regarding the SFTR Reporting Framework. Alexandros, has extensive experience in advising international financial services organisations on regulatory and risk management matters related to MiFiD II/MiFIR, EMIR, SFTR, AMLD 4, AIFMD, UCITS, PRIIPs/KID, Market Abuse and Transparency. Please click here to read the document: “SFTR FAQ: Insights from 10 experts”.