Dunstan Thomas, a disclosure solutions provider, has launched four new MiFID II reporting solutions designed to enable asset managers to meet new MiFID II reporting requirements which will be enforceable in just five months’ time, from 3 January 2018.
New rules which were confirmed in the 1,068-page Markets in Financial Instruments Directive (MiFID) Implementation Policy Statement II (PS 17/14) published by the Financial Conduct Authority on 3 July, demand the issue of pre-and post-sales illustrations to investors as well as new Depreciation Reports and a new minimum requirement for quarterly Performance Reports.
Dunstan Thomas is now able to provide asset managers with new ‘Ex-ante’ point of sale illustrations. ‘Ex-ante’ disclosure rules demand a point of sale illustration disclosing key investment product and service costs and charges which investors can expect to incur annually. These illustrations will need to be very similar in format to new business illustrations which Dunstan Thomas Imago has been delivering for personal pensions providers for more than 20 years.
European Securities & Market Authority guidelines, which provide some of the more detailed requirements in MiFID II, demand that firms give investors a point of sale illustration showing “the cumulative effect of costs on returns which must be comprehensive of anticipated spikes or fluctuations (relating to upfront fees, exit costs etc.)”
New ‘Ex-post’ sales disclosure requirements also demand an annualised breakdown of costs accumulated where asset managers have (or have had) a relationship with the client during the year. The guidance also states, that where post-sale disclosure is provided on a regular basis, it should be personalised. Many of the product and service charge costs being disclosed in these illustrations have not been disclosed to investors before and they are likely to be heavily scrutinised.
Dunstan Thomas’ Imago Front Office already provides annual review documentation to Defined Contribution (DC) pension policy holders in line with Statutory Money Purchase Illustration (SMPI) requirements, for leading pension providers for many years and has now completed adaptation of its Imago Front Office module to meet this MiFID II compliance requirement for asset managers.
Dunstan Thomas Imago now supports delivery of new Depreciation Reports. MiFID II demands that asset managers issue so-called ‘depreciation reports’ to investors if an asset provided by their firm goes down by more than 10 per cent. Dunstan Thomas Imago Portal can help assemble and make this report available online via Imago Portal.
Dunstan Thomas Imago Portal can also be used to assemble and deliver MiFID II-required Quarterly Performance Reports online to advisers and clients alike. These reports will also be statutorily required quarterly from 3rd January 2018. Currently, most asset managers deliver performance reports twice per year, delivering them by post only – so many firms will see a doubling of costs to report quarterly if they don’t put in an online delivery channel.
Bryan Beeston (pictured), Business Development Director at Dunstan Thomas, says: “Having unpicked MiFID II disclosure requirements, we spotted that asset managers were not focusing enough on the investor reporting and pre- and post-sale illustration requirements within MiFID II. Because we have such depth in understanding of how the data for these types of illustrations and reports can be brought together from a range of data sources, tailored to specific audiences and then presented both online and in paper form, it made sense to offer ready solutions to meet asset managers’ needs ahead of their tight MiFID II compliance deadline.”