MiFIR/MiFID II arrives on January 3rd, 2018
Best Execution and MiFID II MiFID II arrives on January 2018. With it are new standards for Best Execution that brokers will need to adhere to. Cappitech is here to help.
What’s new for 2018?
To adhere with Best Execution, investment firms are required to “take all reasonable steps” to obtain the best possible price when executing client orders, taking into items such as costs, speed, size and likelihood of execution
According to ESMA (link), this includes:
- Creating an “order execution policy” that is published and available for clients to review
- Different asset classes should have specific policies applied to them such as the best venues to handle client executions
- Investment firms should have in place methods to monitor that customer executions are following their policy
- A process should be in place to escalate any execution issues to management for remediation
- Per client request, investment firms are required to provide means to demonstrate to customers how their orders are executed within the execution policies
Solving Best Execution with Cappitech
To handle new standards of Best Execution, Cappitech has built a new platform just in time for MiFID II
How it works:
- Cappitech integrates with customer database or trading platform to consume execution information
- Broker or bank uses platform to ses details of their execution policy
- Client transactions are compared to benchmark rates from Thomson Reuters
- Transaction prices are adjusted for the broker’s execution policy
- Results are deviations are displayed on interactive dashboard
- Reports are available to download to share internally and with clients
Risk Management and compliance
Along with detecting execution quality, the platform also provides risk management features. Using the solution, firms are also able to spot out of market trades. These may be the result of market data latency issues used to price securities or traders taking advantage of pricing errors.
“We partnered with Cappitech for EMIR reporting and not only have we reduced our reporting costs, but we also benefit from a full outsourced solution that reduces our total cost of ownership more than originally expected. “
OR KAPELINSKY , MANAGING DIRECTOR, iFOREX CY
“Cappitech has delivered several critical front, middle and back office projects for us over a number of years. I have always found them to be responsive to our needs and able to deliver high quality solutions in a timely but risk averse manner”
Mike Green, COO ITG Europe
“ITG have partnered with Cappitech since its inception. The confidence and trust that Cappitech has built with us through their high-caliber staff and the quality of their work has allowed ITG to continue to develop its technology and product suite in an innovative and productive manner. We view Cappitech as a key strategic partner for ITG".
David Meitz, CTO, ITG