The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

SIX Financial Information Develops Utility for Compliance with Investor Protection Rules

SIX Financial Information is developing a document management utility designed to help financial institutions comply with investor protection rules issued by the European Securities and Markets Authority (ESMA) and due to take effect on January 1st 2017. The rules are also an element of Markets in Financial Instruments Directive II (MiFID II), a European regulation that is expected to come into force in January 2018.

The ESMA investor protection rules require manufacturers and distributors of Packaged Retail and Insurance based Investment Products (PRIIPs), including investment banks, wealth management firms and portfolio managers, to produce standardised Key Information Documents (KIDs) that describe each product in plain language and make the documents available to private individuals resident in the European Economic Area before a PRIIP is bought.

SIX’s solution to compliance with the rules is a multi-tenanted utility that allows documents to be created once and used many times. The utility is built on underlying technology from Ariva, a specialist in structured product documents, and uses law firm Ashurst to provide legal content that must be included in KIDs and provided in many languages to meet to meet the requirements of the rules.

Using the SIX utility, PRIIP manufacturers will be able to create documents in near real time and make sure they are kept up to date using reference and market data from SIX. The PRIIP KIDs can then be fed into a bank’s core banking software or trading platform, while product distributors can use the utility to browse KIDs from any issuer and deliver them to retail investors on demand. To date, a large number of issuers of documents have shown interest in using the distribution platform within the utility. The documents are permissioned for distributor access by the utility and can be downloaded as PDFs or viewed via an electronic link to the utility.

Phillip Lynch, head of markets, products and strategy at SIX Financial Information, explains: “Our aim is to take the pressure off clients by reducing the cost and complexity of meeting the rules. We remove uncertainty about how to put new processes in place and allow clients to take advantage of a scalable, utility approach to investor protection.”

The SIX service is in demonstration mode and is expected to start signing up customers on a licence basis in the second half of this year as the regulatory deadline approaches. Lynch says there is a lot of client interest in the service, which can provide compliance with not only ESMA’s upcoming investor protection rules, but also MiFID II investor protection requirements and regulations around Undertakings for Collective Investment in Transferable Securities (UCITS) that will make them PRIIPs requiring KIDs in 2020.

Related content

WEBINAR

Upcoming Webinar: Regulatory change management – challenges, solutions and case studies

Date: 7 December 2021 Time: 10:00am ET / 3:00pm London / 4:00pm CET Duration: 50 minutes Regulatory change has become part of the fabric of capital markets. It has also become increasingly complex as more regulations are introduced, significant amendments are made frequently, and small changes are made on a rolling basis – the whole...

BLOG

BMO GAM Adopts Nice to Monitor WFH Staff Comms

BMO Global Asset Management (BMO GAM) is addressing the need for communications recording of staff working from home (WFH) through the deployment of Nice’s Cloud Compliance Recording solution for Microsoft Teams. The Nice implementation will allow BMO GAM – part of Canada’s BMO Financial Group – to meet certain regulatory requirements around recording omnichannel communications...

EVENT

Data Management Summit Virtual (Redirected)

The Data Management Summit Virtual brings together the global data management community to share lessons learned, best practice guidance and latest innovations to emerge from the recent crisis. Hear from leading data practitioners and innovators from the UK, US and Europe who will share insights into how they are pushing the boundaries with data to deliver value with flexible but resilient data driven strategies.

GUIDE

ESG Handbook 2021

A-Team Group’s ESG Handbook 2021 is a ‘must read’ for all capital markets participants, data vendors and solutions providers involved in Environmental, Social and Governance (ESG) investing and product development. It includes extensive coverage of all elements of ESG, from an initial definition and why ESG is important, to existing and emerging regulations, data challenges...