PRIIPs and MiFID II Reporting
The Markets in Financial Instruments Directive (MiFID II) and the Packaged Retail and Insurance-based Investment Products (PRIIPs) regulations bring increasing disclosure requirements for asset managers and insurance companies. These include fund static data as well as complex risk analytics that poses new challenges for the industry. UCITS are required to publish a Key Investor Information Document (KIID) as well as a Key Information Document (KID) under PRIIPs starting from 2022. Theses documents aim to outline the key characteristics of the fund and are to be provided to investors prior to an investment decision.
The FinDatEx is a joint structure established by representatives of the European Financial Services sector industry with the view to coordinate, organize and carry out standardization work to facilitate the exchange of data between stakeholders in the application of European Financial markets legislation, such as MiFID II, PRIIPs and Solvency 2. Two of the most prominent templates are the EMT for MiFID II and the EPT for PRIIPs. SolvencyAnalytics supports its clients with the production of these templates including the computation of all the required risk figures. The most critical prerequisite for these calculations is high-quality fund accounting data, transaction information as well as security reference data. SolvencyAnalytics’ “full service” philosophy relies on the following three pillars.
Reporting and dissemination
First and foremost high-quality input data has to be obtained from various data sources. Depending on the required data attribute the source might be very different. Administrators typically tend to be able to provide NAV, dividend and holdings data for the funds. Front office systems, trading tools tend to be the best source for obtaining transaction history. Lastly working with third-party vendors might be the most efficient way to obtain security reference data for listed securities. SolvencyAnalytics doesn’t require the client or its service providers to provide data in a prespecified format, but on the contrary, we build an interface to the standard data output of the best possible data source. This significantly reduces the operational effort required on the client’s side as well as it allows us to obtain data in a robust and scalable manner. The input data is ideally sourced, parsed, and validated on a daily basis. Validation tests include standard requirements imposed by our system as well as custom requirements specific to the client’s data source. We work with an increasing number of fund administrators as well as front office systems to systematically source data required for calculations. These interfaces are developed or enhanced during the onboarding phase to meet all the client-specific requirements.
Once the data is parsed, tested and stored in our system the analytical work can start. We provide a large and growing number of calculations. This includes but is not limited to UCITS SRRI and PRIIPs SRI (including MRM and CRM), Scenarios, Reduction in Yield and Transaction Costs. The results of these calculations are available to our clients through our online interactive platform that provides 24/7 access to all data stored in our systems. The risk figures then feed into various reports such as KIID, KID, EMT, and EPT and others
Reporting and dissemination
The final step of the process is the report generation and dissemination. We produce a wide array of templates such as standard EMT, EPT, UCITS KIID and PRIIPs KID, CEPT, FCA DC, LGPS, and many others. We understand the bespoke requirement of our clients and for mandate managers, we offer customized reporting templates and calculations. Prior to dissemination we validate and test all reports. This includes standard requirements as well as client-defined validation rules. The final reports and risk calculations are then sent to the required recipients which might include platforms, clients, and data aggregators.
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