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By Joseph Bartolotta (pictured) – How many vehicles are on the road today with a “Schedule Service” message displayed on the instrument panel? And how many drivers will ignore it for yet another day? Why do we ignore those messages? Lots of reasons. For one, getting that oil change or not really won’t affect how the car runs or performs right now. It will of course impact the vehicle’s future performance and longevity, but that’s not an immediate priority to many drivers. Then there’s the argument of not having enough time. Even though we know that 30 minutes now can avoid
Research unbundling is creating a whole new marketplace model for research procurement and consumption.  One of the biggest changes that asset managers face under MiFID II will be the need to unbundle research payments from execution commissions and provide evidence on how they are paying for that research, to the optimal benefit of their investors. This is likely to shake up sell-side research departments and those independent research providers with limited distribution capabilities, with some fearing that it could potentially reduce the quantity of research in the marketplace. But with every challenge there is a new opportunity. Research platforms are
Investment managers running UCITS funds or Alternative Investment Funds (AIFs) will not fall directly under MiFID II or have any legal obligation to comply with regulation or require a MiFID license. However, from a product governance perspective, they will be impacted indirectly. This is because their fund distribution partners, such as MiFID licensed bank platforms, will be required to define the investor target market for each product.  "Consequently, if Asset Managers want to stay in business it becomes essential for them to define the target market for all their funds at the share class level and communicate this to their
Anyone who has bought or sold a home knows that, prior to closing, an inspector usually verifies the property's condition. The buyer doesn't simply accept the seller's representation that the home is sturdy and unlikely to collapse. An inspection lays bare the houses faults, giving the buyer comfort in the home's condition and absolving the seller of ongoing responsibility. While such a careful examination might not be typical of most markets, the European financial markets are not most markets, and regulators are imposing a type of inspection requirement under MiFID II Article 17. Article 17 and Regulatory Technical Standard 6
On forecasting the likely actions of Russia during the Second World War, UK Prime Minister, Sir Winston Churchill, spoke of it as a ‘riddle wrapped in a mystery inside an enigma'. Alternative asset managers might be forgiven for thinking the same about the devilish complexity of MiFID II. But rather than get bogged down and concerned about the vicissitudes of regulation, managers should focus on the aspects they can control and take practical steps towards becoming compliant. The first point to make is that MiFID II should not be thought about as merely a compliance exercise.  "The buy-side should think more about the
MiFID II aims to increase the accountability and transparency of the financial services industry and represents the latest in a long line of regulatory developments since the '08 global financial crash.  Both buy-side and sell-side MiFID regulated firms are busy focusing on exactly how reporting obligations will impact their existing IT system configurations. According to Paul Yau (pictured), Senior Regulatory Counsel at Advise Technologies, whose Consensus Regulatory Management System is used by investment managers for a repeatable, reliable, and automated filing process, the current environment reminds him of when firms were preparing for Annex IV reporting under AIFMD a few
Colt Technologies is a private telecoms company owned by Fidelity. It delivers secure, on-demand services designed to meet the stringent requirements and speed of the financial markets. Among the more than 400 capital markets firms it supports worldwide includes 18 of the 25 largest global banks and 13 European central banks. With both sell-side and buy-side firms looking for reliable access to market data under MiFID II, having the requisite market infrastructure in place is a potentially daunting task. This is where Colt Technologies – specifically its Colt Capital Markets division – comes in. Using Colt PrizmNet, a fully managed
At the last count, there were approximately 1,384 pieces of information to look through under MiFID II. For Chief Compliance Officers, that is an awful lot of work to get on top of, which is why implementing a compliance roadmap as early as possible is so important.  To help with this, Duff & Phelps, one of the industry's leading regulatory compliance firms, has produced a solution named MAST: MiFID Analyser Solution & Tracker. This enables people to fast track in and identify, according to the permissions they have, what rules are likely to hit them and identify a `To do'
MiFID II comes into effect on 3 January 2018 and will likely require fund managers to make significant changes to their systems, governance and controls & procedures.  One of the first preparatory steps to take is for fund managers to gain a clear understanding of exactly how the regulation will impact them through an impact assessment and gap analysis. Developing an implementation project plan is not an easy task and will require a joined up analysis across the various functions of the firm. Some key areas of focus will centre around commissions, the use of research and how it is
The introduction of MiFID II and MiFIR on 3 January 2018 will impact every aspect of how financial institutions do business. The scale of the task cannot be underestimated. For buy-side firms, getting the right vendor relationships in place will be vital to ensuring that they operate under the regulations in as efficient and compliant a way as possible.  To help frame this vendor selection exercise, in March 2017 the Alternative Investment Management Association (AIMA) compiled a report, detailing the most effective third party vendor solutions. These span: transaction reporting; post-trade reporting; best execution/transaction cost analysis; telephone recording and surveillance;

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