By Eva Keogan
By Luuk Jacobs
By Jonathan Max
By Luuk Jacobs
By Andy Milner
By Julia Kirkland
Guest blog from Julia Kirkland, Senior Partner at FSTP
If you don’t know already, which of course you do, the Markets in Financial Instruments Directive (MiFID) is EU legislation which first came into effect in 2007. It was created to regulate firms providing services to their clients which are linked to ‘financial instruments’, these being shares, bonds, units in collective investment schemes and derivatives. In addition, it covers the venues where those ‘financial instruments’ are traded.
Fast forward 10 years or so and we have an updated version – MiFID II. This includes the revised MiFID and a new Markets in Financial Instruments Regulation (MiFIR). January 3, 2018 is the day MiFID II must be implemented across Europe.
Now we’re on the cusp of this deadline, the thorny and sensitive topic of Knowledge and Competence (K&C) is bubbling up as a major concern across the industry. We’ve spoken with numerous firms in both the Asset Management and Wealth Management sectors and they have one thing in common; they’re all grappling with the assessment of competence of information providers.
Who is in scope?
In Asset Management, this may cover a wide range of roles from sales teams, client services, broker servicing staff to Portfolio Managers (the really sensitive aspect of K&C). Managers may struggle with the fact they must tell a Portfolio Manager of 20 years plus who hasn’t got a formal qualification, they need to be assessed as competent and in a very short timeframe too.
In Wealth, the scope may cover desk assistants, team secretaries and portfolio assistants who may all be in direct contact with clients, giving them information about prices, valuations, charges and providing generic market or sector views. Additionally, research teams who might attend meetings with clients to provide market, sector or stock views on a non-advised basis may fall under this too. Most of the firms we are speaking to are including research teams. Most of the above staff members have never been included in formal K&C Schemes before but this has changed.
What happens in 2018?
As it stands, information providers not assessed by January 3 will need to be supervised in their activities and oversight of any client interaction must be in place. If you’re not prepared, January 2018 is fast approaching and maybe it’s time to look outside your company for third party support and assistance.
Our guest blogger Julia Kirkland, is Senior Partner, FSTP
FSTP is a training solution provider with expertise in MiFID II and the company also runs workshops to cover Wealth and Asset Management to meet the ESMA requirements and provides advanced K&C assessments for more seasoned, professional staff.
By Colin Ng
FT has an article today on a slowdown in the global stock market. Conversely, the bond markets have been rallying as investors move to protect their portfolios with 'safer' sovereign debt. This demand has brought the yields down (seen as less risky) and prices up. With more money being absorbed into the bond markets (and other safer asset classes), there is less flowing into stocks.
A key point raised was that the 3 month vs 10 year US Treasury Bill spread has been shrinking steadily over the last year - one of the tell tale signs of an upcoming recession. Yields on 10 year bills are falling to at par or lower than 3 month yields which indicates the market is bearish about longer term economic prospects.
Though i do wonder if this situation is temporary and it is bit premature to point towards a potential recession.
Interest rates are being artificially suppressed at the moment at a time when there are other signs of an improving economy (not overheating) with high levels of employment and rising public debt as a % of GDP (250%). There is only one way interest rates will go in the future and when it does, traditional economic theories point to a corresponding increase in bond yields. This should have an effect of widening again the 3 month to 10 year bill yield spread, reversing the effects of the above.
I'm definitely not an economist so would love to hear what other schools of thoughts are out there!
By Colin Ng
Came across this very interesting (and funny) read in today's FT
By Andy Milner
Our mission at AlgoMe is to connect the Investment Management Industry - the professionals that work in it, as well as the Asset Managers, FinTechs and other organisations that make up the wider industry ecosystem.
That's why we're excited to announce our first cohort of AlgoMe Community Partners - companies that work within Investment Management and share our ethos of working together to address the challenges and opportunities facing the Industry. They will become active participants in the Community, keeping us up to date on their diverse areas of expertise by sharing their insights and events, and helping answer your questions.
On each Partner's profile page you can find out more about the company, see articles published by them, discussions related to them, and a list of associated members.
If your organisation would like to join as an AlgoMe Community Partner, please get in touch via the Community or by email to firstname.lastname@example.org.
Velocity is the FinTech Accelerator by the Investment Association, designed to identify, develop and accelerate best in class firms with innovative solutions, facilitating the adoption of technology within asset management.
Cass Business School is one of City, University of London’s five Schools. It’s among Europe’s leading business schools and in the global elite of business schools that hold the gold standard of ‘triple-crown’ accreditation.
Alongside its MBA, Cass offers a number of Masters courses including an MSc in Investment Management.
Cleveland & Co is a specialist outsourced legal team, with a market leading reputation for providing the highest quality legal services in the investment management sector.
Saffron Robo is a software, services and support company that provides a cloud based, end to end Robo solution designed to offer front-end to back-end functionality, for all product ranges including: EFT’s, Funds, Equities, Bonds and Fixed Income products, via a secure hosted web based solution.
FSTP is an award-winning training and consultancy services company, helping firms in the Investment Management industry improve compliance and governance standards.
ClauseMatch is a regulatory technology company with a unique SAAS offering, that enables financial institutions to streamline regulatory change management through effective organisation of internal policies, standards, procedures, and controls.
People Risk Solutions is a client-focused Human Resources consultancy, with a passion for improving business performance through the development of high-performing people.
Waymark uses AI to continually monitor and analyse regulatory changes, and makes recommendations to corporate and consultancy clients to ensure compliance. With the ever increasing changes in regulations, WayMark lets firms work smarter and achieve more with existing resource.
We're looking forward to announcing more partners in the near future, so watch this space.
By Jonathan Max
Really interesting article from HRB on whether Men and Women needed different kinds of networks to succeed following a study on the networks of male and female MBAs suggests that males being successful in the workforce was largely dependent on being active in a social network where as women often also sough an 'inner circle' in addition to a broader network.
Would be great to hear what our MBS/MSc members think?
Research: Men and Women Need Different Kinds of Networks to Succeed
HBR.ORG Results from a study of MBAs.