MiFID II
How do we help?
MiFID II regulation came into effect in 2018 and set out new rules, especially for the distribution of financial products to retail investors. Distributors need to classify financial products and make sure that they’re suitable for their clients. As, in most cases, the distributors are not the manufacturers of funds, MiFID II consequently causes a significant reporting burden to asset managers.
Static Data, Target Market Classifications, and Cost & Charges
We integrate fund static data, target market classifications and cost data from various sources (including asset managers and fund administrators etc) and establish a golden source of information for all MiFID II related reports and data disclosures.
Production of EMT 4.0
Production and dissemination of the latest European MiFID
Template (EMT 4.0) in accordance with the FinDatEx data standard.
Our automation
service
includes Cost and Charges calculations.
How we do it?
Background
The original Markets in Financial Instruments Directive (MiFID) was introduced in
November 2007 with the aim
of regulating the distribution of financial products and strengthen the competitiveness of the
European financial markets.
However, the 2008 financial crisis pointed out several weaknesses of MiFID I. MiFID II came into
force in 2018 and directly
responded to the protection of private investors.
One of the key points of MIFID II is the
so-called ‘target market’
classifications. Distributors such as banks need to classify all products which they’re selling to
retail investors. This also
applies to funds sold by distributors, although UCITS managers are not directly covered by this part
of the regulation. As distributors
are neither the managers of the funds nor the data owners, they rely on the asset managers to
provide all relevant data.
Reporting Requirements
To facilitate the data exchange, the EMT was introduced by the FinDatEx
working group. With the
MiFID II changes came into force on 1 August 2022 are intended to reflect ESG investment preferences
with regards to fund distribution,
going forward the new EMT 4.0 will be aligned with the EET. EMT 4.0 no longer includes ESG-related
target market criteria (especially
concerning the German fund market) as was the case in EMT 3.1. Instead, all relevant ESG target
market information and preferences are
instead represented in the EET.
Therefore, distributors and providers are expecting both
templates to be provided jointly, in order
to receive full coverage of SFDR and MiFID II data. This improvement positively impacts the
dissemination of fund data, as different formatting
and logical requirements across several markets will no longer be a significant challenge for asset
managers.
