SIA (Società Interbancaria per l’Automazione – Inter-bank Society for Automation) will launch, by the end of the year, two new technological services to enable each investor to identify the best financial market on which to carry out its investment transactions and manage the relationship with the broker by means of an “electronic contract”.
The "execution navigator" and the "electronic contract" integrate the features of SIA-EAGLE, the first technological platform in Europe totally dedicated to the monitoring and control of all financial markets transactions, MiFID compliant.
The two new services will allow, on one hand, the integration, consolidation and real-time comparison of the execution alternatives at the various trading venues and, on the other hand, will prove to the investor, by means of regular reporting, the attainment of the best available conditions in terms of profitability, cost and timing, in line with the contractually defined execution strategy.
The announcement was given today at the "Compliance: innovation for the new execution process" meeting, the first of three days focusing on the MiFID trading directive key themes.
"The interest showed by the operators to today's meeting confirms that the MiFID is seen as a key element of the EU Financial Services Action Plan whose aim is that of setting a single European financial services market" commented Renzo Vanetti, SIA's CEO. "We need to innovate in order to sustain the growth of a border-free market, as well as to improve efficiency and invest at once to lower the costs of adjusting to the regulation and be in a position to compete so as to generate new economic and financial growth. SIA's services and products will enable operators to achieve these European market competitivity goals right away."
During the event, the SDA Bocconi School of Management, SIA and HP Consulting & Integration also gave a preview of the results of the pilot stage of the survey aimed at looking into the current state of the compliance function of financial operators active in Italy in the investment services sector and how its organisation is likely to develop.
The indications emerged in this pilot stage will then be extended to all the parties involved in investment services, international level as well.
The research survey took the form of interviews with the compliance managers of a representative sample of banking and financial brokers at Italian level. 10 bank groups and negotiator brokers representing over 60% of the total, as well as 7 funds management companies, accounting for 40% of the sector.
Investment services are for the first time the main focus of compliance research, at a time when brokers are being asked to make significant changes to their organisation as a result of the new MiFID directive.
The survey comprised in four parts, designed to analyse the followings:
- The positioning of the compliance function within the intermediaries: the main aspect to emerge is that the compliance function reports for about 30% to the Board of Directors, about 30% to the CEO, 12% to the Managing Director. When the function is not independent, it is part of the Audit Dept. (23%) or the Legal Dept. (12%). In the 60% of the cases analysed, less than 5 resources are involved full time. How the function is internally organised differs greatly from case to case - in some cases, the task specialisation is by legislative area, in others by business area and, in others, by type of activity.
- The roles assigned to the compliance function: the skills of the resources used within the functions are basically legal and regulatory, audit and product skill. It has been seen that the standards often provide a stimulus for process and product innovation. More than half of the sample has developed dedicated applications, often used for the purposes of anti-money laundering monitoring and controls. All the compliance managers involved in this first stage of the survey feel that the costs of the compliance function will increase significantly over the next three years.
- The methodologies for measuring, transferring and mitigating the compliance risk: 60% of the involved banks and Funds Management Companies (SGR) says they have started the process to measure the compliance risk, even if only 10% of these have actually estimated the capital at risk for compliance events purposes.
- The interaction between the compliance function and those within and outside the company: this takes place through a complex range of communication tools and instruments (intranet and meetings, essentially). An aspect which must be completed is the link between compliance and value-incentive systems. In almost all cases, the compliance function is characterised as a body that has been given responsibility for implementation of the MiFID, with the role of propellant and consultant that also actively takes part in the implementation phase.
The partnership between SIA, SDA Bocconi and HP Consulting & Integration has been extended to the development of mathematical models for "automatic" identification of non standard or suspect operations or conduct which could disturb the market, in line with the new EU directives for the financial markets regulation.
The target models will then be implemented and integrated within the current SIA-EAGLE technological platform.
The second meeting, "Financial Informative System: market information management: restriction and opportunities" will be held on 6 March on next (9.00 am -1.00 pm) at SIA Atrium in Milan Via Taramelli, 26,.
The cycle of three days appointments focuse on the key themes involved in the MiFID trading directive (Compliance, Reporting and Trading), is organised by Accenture, ASSOSIM and SIA, in collaboration with GLESIA, Kedrios, Milano Finanza and UBM.