Six Financial Information has launched a new platform, which was developed 'in close consultation with the industry', to enable the electronic and efficient exchange of regulatory data and documentation between wealth managers, assets managers, banks and other market participants.
From 3 January 2018, financial institutions located anywhere in the world selling retail investment products to investors domiciled in the European Union must comply with multiple investor protection regulations, including packaged retail and insurance-based investment products (Priips), markets in financial instruments directive (Mifid 2) and undertakings for collective investment in transferable securities (Ucits).
According to Alex Dorfmann (pictured), director of product management at SIX Financial Information, the new platform responds to new regulatory requirements. "ESMA requires the ISIN for any product traded in the financial market," said Dorfmann. "This especially puts pressure on the manufacturer when it comes to trading OTC and structured products. Being a numbering agency ourselves we feel the obligation to provide a standard interface to the Derivatives Service Bureau (DSB) for the market to gain easy, fast and reliable requesting of ISIN for OTC and structured products."
Companies will have a new duty to exchange data and information about the content and sales of retail investment products, as well as create and issue regulatory documents such as the Priips Kid. 'With 87 years of experience in financial information services, we specialise in helping firms understand and manage data for regulations,' said Philip Lynch, head of markets, products & strategy Six Financial Information. 'We have taken that experience and collaborated with the industry to develop this mutualised response to the huge challenge that firms will face in managing and exchanging regulatory data and documentation.'
The new platform underpins Six's existing Mifid 2 data offering and Priips document generation and distribution services, making them easier to consume.
Relationship managers will, for example, benefit by being able to use it as an interface to interact with the product issuers whose products they sell to make sure they offer products that match their client's profile and then report back on who they sold to, according to Lynch. The platform will also make it easier for banks to automate their internal processes, enable two-way connections and feedback loops between the buy-side and sell-side. In addition, retail investors will be able to access a 'diverse global investment portfolio and transparent costs'.
'This platform, with its 'ready-to-consume' data, will help banks automate and scale their operations, reducing costs and increasing the speed of compliance,' said Lynch. 'Instead of focusing on each regulation individually, clients can depend on Six to support regulatory compliance for current and future regulations in tandem. Retail investors will benefit from a robust industry platform that helps make the investment market more secure and efficient, and allows access a diverse global investment portfolio with maximum transparency.'
Since the same data points are often required in different levels of granularity for different regulations, the platform also acts as a central source for investor protection data, according to Lynch.
Product data, information and documents will be generated and exchanged in real-time in a standardised way, and in the right format for each regulation. The platform also allows information and documents to be requested on-demand at the point of sale, rather than potentially multiple times each day for thousands of products, reducing costly unnecessary processes.
SRP data shows that issuance in Switzerland stood at 243,828 products, worth an estimated €18.2bn by year end 2016, whereas thsi year's issuance stands at 123,055, worth an estimated €6.9bn. The Swiss market is dominated by Vontobel (37% market share this year), Leonteq (21%), UBS (11%), Julius Baer and Credit Suisse (7% apiece). In Europe, issuance in 2016 amounted to over 1.5 million products, worth an estimated €108bn while this year's issuance stands at 747,000 and €45bn. The European issuer ranking for 2016 was led by Commerzbank, Citi, BNP Paribas, Deutsche Bank and Vontobel.
Six Swiss Exchange reported earlier this month that trading turnover across all securities traded on exchange totalled CHF723.6bn (€655.3bn) in the first half of 2017, which represents an increase of 5.3% on the corresponding period last year. The average trading turnover per day came in at CHF5.8bn, while the number of transactions increased: 25,943,274 trades were conducted in total, a rise of 2.1% on the first half of 2016.
However, the exchange also reported that, in the first six months of 2017, issuance of structured products and warrants fell by 3.5%.
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