Recent actions by regulatory authorities have highlighted the critical need for investment firms to prioritise the protection of their clients’ interests. ESMA introduced Best Execution monitoring as part of MiFID I in 2007. Since then, standards for complying with Best Execution have gotten stricter. Firms that fail to ensure robust Best Execution practices are facing fines, as authorities are serious about addressing non-compliance and misconduct. The stakes are high; enhancing investor protection and supporting responsible growth in the investment sector is paramount.
What are the key challenges firms face in Best Execution Monitoring?
- Complex Regulatory Landscape: Navigating through various regulations can be overwhelming.
- Data Management Issues: Collecting and analysing vast amounts of data accurately is challenging.
- Resource Allocation: Ensuring sufficient staffing and technology investments for compliance efforts.
- Technology Integration: Difficulty in integrating new monitoring systems with existing infrastructure.
- Client Expectations: Balancing compliance with providing clients the best possible service.
Are You Aware of Compliance Checks?
Firms need to ask themselves: Are you fully equipped to meet Best Execution standards? Understanding the key requirements and metrics for monitoring execution quality is crucial to protecting your clients’ interests.
As mentioned above, to ensure compliance, companies must monitor whether their transactions consistently deliver the best possible outcome for clients. This involves considering factors such as price, cost, speed, likelihood of execution, settlement, order size and nature, and any other relevant elements. Monitoring can be done through manual checks or, more effectively, by leveraging RegTech solutions from specialized regulatory compliance providers.
Are You Ready to Take Action?
Are you prepared to implement comprehensive measures that ensure adherence to these vital regulations? The readiness to invest in effective monitoring systems can make all the difference in avoiding penalties and fostering client trust.
MAP FinTech: Your Solution for Compliance
ΜΑΡ FinTech offers a fully automated tool for Best Execution Monitoring. The platform not only satisfies the requirements of financial regulators and MIFID II, but also offers a holistic view of your Best Execution provisions with more than 40 analytical checks applied on all execution components (price, cost, speed, likelihood and settlement, size, price continuity or any other consideration relevant to the order’s execution).
Checks include number of orders, percentages, volumes, monetary values, types of orders, types of costs, and benchmarks such as average industry speed, quote delay tolerance, application of charges, and more. In addition, the platform offers the ability to view complex analytics, input comments, record monitoring, and corrective measures, set alerts, and export reports for record-keeping, business, and proof of compliance purposes.
With features such as real-time data analytics, web-based dashboards, and case management capabilities, our platform streamlines the process of meeting regulatory obligations while providing evidence for any necessary investigations. Most importantly, our solution covers all relevant asset classes, ensuring that firms have comprehensive compliance coverage across their entire portfolio.
Contact our team for more information.