Bips Global

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'Best investment process solutions'

Bips is a financial services consultancy committed to helping firms with best execution design, process, and management, while easing regulatory burdens.

Bips offers only trusted industry experts with unrivalled business experience, who are able to make an intelligent contribution, immediately.

We are independent and work with your teams to navigate the sea of rules, market practice and systems solutions to arrive at the best, low cost structure for your organisation in 2017 and beyond.

Every basis point saved is performance gained.

Bipsblog

By mark northwood 15 Mar, 2017
On March 3rd the UK's Financial Conduct Authority (FCA) published updates from its supervisory work in two key areas: how investment managers deliver best execution for their clients, and how they manage the use of dealing commissions.
Links here:
https://www.fca.org.uk/news/news-stories/investment-managers-still-failing-ensure-effective-oversigh...https://www.fca.org.uk/news/news-stories/firms-continue-fail-meet-our-expectations-use-dealing-commi...

The message is clear: The FCA believes that the buy side is still not doing enough to protect the interests of their clients in two areas where they have a clear fiduciary responsibility. The industry is very focused on the minute details of trading venues and the interactions between sell side and buy side, but is missing the point that the FCA wants better outcomes for the " my side ", the individuals (probably including you), who collectively own the assets being managed by the buy side, in pension funds and other pooled investment products.

This is an important distinction, because it clearly defines 2 tests for each decision made by an investment firm's management team, and all of its employees:
1) Does this improve the outcome for our clients?
2) Does this risk doing harm to the interests of our clients?

Importantly then, business initiatives and projects that improve operational efficiency (and profitability) of the investment firm must pass these tests by, for example, passing on cost savings to clients thorough either lower charges, or producing demonstrably better investment performance. 

These tests should also be considered in the context of the consolidation currently taking place among asset management firms. 

Bips Global is experienced in advising on how to meet the expectations of "my side" clients and regulators, so please call us.
By mark northwood 28 Nov, 2016
2017 is nearly upon us. 2016 has been a year of upsets and distractions, so there were plenty of excuses for putting off the additional work required to prepare your organisation for all the changes arriving in 13 months time.

The largest firms have had MiFID projects underway for some time now, usually with streams dedicated to particular functional areas which are covered by specific articles and technical standards within the level 2 text, and level 3 guidelines where they are available. But for many firms the primary focus of the management team is rightly fixed on running their business, and the risks are growing every day that there will be insufficient time to implement changes.

The longest lead times are normally associated with projects involving adding new vendor solutions to legacy technology, or developing new code within existing systems. Big firms have big technology stacks and lengthy development, testing, QA and user acceptance procedures for vendor products or code changes, which stretch out the timetable. Smaller firms with simpler, platforms may be a little more nimble, as long as they accept some compromises on the functionality they will get through solutions offered by their enterprise providers, for example. The principal areas of concern here are the greater recording and reporting burdens on investment firms across all asset classes.

Changes to business structures, where particular entities which house a regulated activity are not registered in the correct country for example, also incur a big time penalty and should be underway. Firms with their investment teams spread across more than one country need to examine the internal relationships carefully.

Updating processes, practices and the associated policies can be done more quickly, as long as there is sufficient management attention, supported by clear guidance from those with detailed knowledge of the RTS and ITS requirements. A good example is the investment firm's execution policy, which must be easily understood by the firm's clients, but be specific for each of the 20 or so different classes of financial instrument which they may trade.

Consultancy firms like Bips, and others that we are collaborating with to add complimentary skills, offer investment firms the deep knowledge required to get your MiFID2 preparations moving quickly. We, and our partners only employ experienced market practitioners, so you will not waste expensive time training us up about what you do. All that is required is a quick introduction to your organisation and its processes and systems and the work begins. The added advantage is that you get a fresh, independent perspective from people who have managed similar businesses.

Contact us to learn more about how we can help.
thanks
Mark


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