MiFID II Reporting – Cost and Charges

Automate your costs and charges reporting chain

Automate your costs and charges reporting chain
General inspection, audit, internal control: consolidated real-time indicators and automated reporting give you effective control of entity compliance and streamline the disclosure process by eliminating tedious manual tasks and strengthening regulatory compliance.

Under the investor protection section of MiFID II, the costs and charges disclosure rules require that asset management firms publish updated and detailed information on all costs and associated charges billed to their clients. Different types of costs (inflow/outflow, management, transaction, outperformance, etc.) are almost invariably defined and managed in fragmented systems, sometimes on an outsourced basis. Having a consolidated view of these costs and charges at your fingertips and the ability to track them (or adjust them!) over time is increasingly valuable in a highly competitive and regulated environment.

The Scaled Risk data automation platform integrates costs in their source format, applies quality rules and quickly produces a single, consolidated view of costs, incorporating:

– Definition of funds
– Definition of fund units (compartment)
– Service charges
– Entry/exit fees
– Management fees

Data is automatically and continuously integrated, with calculations updated as necessary so that the reconciled view is always current and up-to-date. What’s more, Scaled Risk’s temporal versioning capability means you can display costs and charges on any date in the past as needed.

Firms need to strike a balance between the increasing impact of regulatory and reporting responsibilities and allocation of resources. Audit and internal control functions are faced with the challenge of creating operational efficiencies – especially considering the exponential increase in the cost of non-compliance.

Advanced analytics, machine learning and RPA provide the technological agility to take over tedious and repetitive tasks and direct your team’s resources towards process control or the highest-risk entities. But how do you scale up these techniques? How do you utilize them as a day-to-day working tool if data are hard to access, dispersed between multiple sources and often poor quality?

Scaled Risk’s data automation platform streamlines this all-important data management function, which often makes up 80% of the workload for a data analysis project. Our platform features an automated recovery process for dispersed information (customer and counterparty characteristics, transactions, completeness and KYC document update timing). It addresses data quality and consolidates the information in a constantly updated, standardised view that teams can access using a simple search engine.

In the investment world, having granular information on customers and counterparties at your fingertips (most recent update of KYC documents, completeness, income thresholds, etc.) is vital to easily calculate an overall compliance score by subsidiary, branch or agency and segment the score by field (AML compliance, tax compliance, credit risk). Internal control managers can swiftly identify the highest risk entities and/or areas and introduce the appropriate remedial actions.