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“Doctor doctor, I think I’m a compliance officer”
Angus Johnston joined Multrees in August 2017 as our Head of Risk and Compliance.
In case you don’t know the rest of the joke, the doctor responds: “Well, have you double-checked?” Like accountants, there are a few jokes made at our expense. It’s not the most rock ‘n’ roll job in the world, but it’s certainly not a quiet one.
I joined Multrees last year, which was the next logical step given my career in enterprise risk management, as well as business governance and analysis. My current role is a progression of my previous experience, which merges the responsibilities of risk and compliance together. Joining the team felt like a natural evolution and it has been a great learning experience.
MiFID II is taking up a lot of my time at the moment, as we continue to build our capability to assist our clients in meeting their regulatory responsibilities. Longer term, I’m looking at how I can improve our policy, procedure and control framework so that we can support the business’ operating model as it grows. When the MiFID II deadline crept up on the industry earlier this year, we saw firms rush to implement the necessary infrastructure to comply with the transaction and trade reporting regulations. Fund managers are required to provide full transparency of their fees and product performance, and we are constantly evaluating new ways to help our clients pass this information on to their clients effectively.
Now that GDPR is just around the corner, we’re working to ensure that the way we store and use data is compliant ahead of the enforcement. On top of that, the Senior Manager Regime is expected to come into force next year which will require some additional regulatory adjustments. Thankfully we have an expert team at Multrees, so ensuring compliance with the new regulations isn’t a cause for concern.
In a world awash with failures, it is more important than ever to be on top of R&C within any business. Sometimes errors can be caused by fundamental system flaws, whilst some result from more simplistic human error. For example, the recent case of the Hawaii missile false alarm resulted from the ‘test’ and ‘live’ options sitting beside one another in a drop down menu. You better hope you don’t have fat finger syndrome!
Speaking of recent events, the “Beast from the East” brought weather chaos to much of the UK for several days this month. While some larger organisations struggled with business continuity meaning their operations practically shut down, by implementing our business continuity plans we were able to maintain service levels with virtually no impact to clients. This really brought home the value of proactive risk management.
Getting to know you
Why I like my job
What I like about Multrees is that everyone wants it to succeed; there are no pockets of people just plodding along doing their own thing. It’s proactive and not some big super tanker which means we can pivot very fast. Everyone is keen to solve problems.
Where Eagles Dare by Alistair McLean. A good old fashioned ripping yarn.
Best advice ever received
I read the meditations of Marcus Aurelius (Roman emperor from 161 to 180) on stoicism and liked what he said about listening to what people say. He teaches that others may have a legitimate point of view and so you shouldn’t project your way of thinking onto someone else. Good advice I try to apply on a daily basis!
Most embarrassing moment
At a corporate sporting event, I sent an ex-England rugby player, Mark Mapletoft, to the bar for me because I mistook him for a waiter. He fetched me a coke, which was very nice of him but I only had the one - I didn’t push my luck.
Budge over Brexit: 2018 is all about innovation and specialism
We have seen a vastly changing business landscape in response to economic events and shifting client needs over recent times – artificial intelligence, user experience, data integration & handling and blockchain. Now we’re into 2018, it’s difficult to predict what will come of political and economic affairs, but we can be sure that technological advancement, innovation, increased regulation and the need for specialist insight will be driving our industry’s agenda.
The wealth sector is known for being fairly traditional, but we are seeing signs of that beginning to change. Technology is moving through the gears at breath-taking speed and clients expect us to keep pace.
I’m excited about this year because it’s an opportunity for firms to seek partnerships with innovative outsourcers and develop specialist solutions, particularly as the new wealth generation present some fresh challenges.
PWC’s latest Global Fintech 2017 report showed that 77% of Financial Institutions will increase internal efforts to innovate and adopt blockchain as part of an in-production system or process by 2020. I expect these figures to increase as institutions look to gain a deeper insight into customer behaviour and ensure day-to-day operations remain efficient and cost effective.
In 2016 alone there were almost 27,000 new blockchain projects on the market, yet only 8% remain active, according to Deloitte’s paper. I think these statistics have the potential to change during a year of more blockchain R&D, so watch this space.
There’s a great need for specialism starting to surface across the industry. Tech-specialists are not the only ones in demand, regulatory experts are also highly sought after. With MiFID II and GDPR, businesses need to assess their current models and make necessary changes to comply with new laws. This is no easy feat for financial services firms and it will result in dramatic and extensive shifts throughout the industry, both in terms of staffing requirements and operational procedures. I’ll be monitoring this with interest! You can read about those regulations in this issue.
I can be found on LinkedIn, where I’ll be happy to hear your thoughts on any of these topics.
Until next time,
“GDPR, yes okay, but what does it mean for my business?”
Jaco Cebula, CTO, Multrees Investor Services, gets down to the details on the coming regulation
It is hard to imagine there is anything left to say about the upcoming General Data Protection Regulation, because it has headlined consistently for months. Despite this, many remain unsure of its implications and the changes necessary to ensure compliance. Our response is simple, you need to understand what the regulation means for your business, and then use it as an opportunity to demonstrate your firm’s robust approach to data governance.
It’s all about the data…
The GDPR – and the copious discussions surrounding it – is heavily focused on data. For financial services firms, the concept of high quality enterprise data, and the associated data governance should be no new thing. GDPR simply extends the scope of the enterprise data governance to include a wider range of personal data over and above standard financial metrics.
At Multrees, our clients rely on us to safeguard their data as well as that of their customers. We oversee thousands of investment accounts, with each one holding personal data, so we know a fair bit about the GDPR and the responsibility we all need to uphold.
For most businesses, the regulation will require a number of work streams to capture the following:
- Identification categorisation of personal data – including all underlying application databases, unstructured data and HR systems.
- Data providence – downstream and upstream analysis of the organisation’s data flows, both internal and external.
- Rationale for holding data.
- Mapping and retrieval of data, plus delivery mechanism – for example, an achievable goal may be to automate the Subject Access Request process from a downstream client, returning all data held across all system boundaries on demand.
- How to handle the process for erasure or for subject access request – key point being that these should not be ‘new’ processes, but will need to be refreshed for GDPR.
- How to report a data breach – clear understanding of responsibility, reporting mechanism, limitations of breach detection capability etc.
- Marketing, CRM and HR databases – greater risk of sensitive data.
- Upstream/ downstream clients and vendors.
This applies not just to customers and prospects, the regulation will impact internal HR data too. As seen with the final point above, businesses will need to assess whether their vendors are GDPR compliant. At Multrees, we know that our business can only move as fast as the slowest component in our process chain, and this includes our vendors. Ahead of the May deadline, 17 vendors will be assessed to ensure they are all compliant.
Multrees too will be subject to assessment as a vendor to all of our client firms, and will need to provide reassurance that we can respond in a timely fashion to regulatory requests.
The EU GDPR will be enforced on the 25th May 2018.
MiFID II transaction reporting: A race against the clock
The Financial Conduct Authority clock starts counting down the second clients make a transaction, but you don’t need to be Jack Bauer to file a report by the end of the next working day. This MiFID II rule is to help prevent market abuse, but reporting a trade can be a race against time if the data isn’t on point and quickly produced.
Clients who use our best-in-class digital platform can have the confidence and convenience of Multrees meeting the regulatory requirement on their behalf. Partnering with us as your outsourcing provider means we already store a wealth of data on each individual account that makes transaction reporting easy. And we can report directly to the FCA without our clients being burdened by any part of the process.
Transaction reporting applies to discretionary or execution only trades, forward FX and some corporate actions.
It’s just one of our quality back office services we provide for the wealth sector.
New year, new Execution Service
Clive Stelfox, COO, on how a level playing field can be a real game changer for Multrees.
Unbundling research costs from execution fees has levelled the playing field for companies like Multrees. MiFID II and its enforcement of cost transparency is a positive development, not just for us but also for our clients. Our new execution service couldn’t be better timed.
The Execution Service offers clients the opportunity of trading a range of asset types through existing systems architecture. This reduces the risk of managing multiple counterparties whilst ensuring timely execution of trades and settlement in the market.
The service covers a range of asset types and all major markets are served. The solution can be accessed through a variety of input methods (e.g. Multrees Order Management System, file transfer, SWIFT) and orders are automatically routed to brokers.
It has the following benefits:
• Comprehensive market coverage via multi-provider solution
• Simple and transparent commission schedule on a per trade basis
• Best execution ensured
• Management of counterparty risk
• Fully MiFID II compliant
As a specialist wealth management solutions provider, our Execution Service gives our clients the scalability and efficiency of a truly automated end-to-end process. Multrees can now take care of all activity post the investment decision to allow our clients to focus on servicing their clients.
Contact us using the details in the footer to discuss using our Execution Service.