SUITABILITY RULES BASED ENGINE

Could your stand up to MiFID II requirements?

When providing investment advice, the investment firm shall, before the transaction is made, provide the client with a statement on suitability in a durable medium specifying the advice given and how that advice meets the preferences, objectives and other characteristics of the retail client” MiFID-II – Article 25

All over the world regulators are introducing investment suitability rules to ensure investor’s protection and ethical sales practice, pushing firms to:

  • Assess and clearly document the customer’s risk profile and rationale for their recommendation
  • Adopt the appropriate systems and controls to ensure enhanced standards are maintained and evidenced
  • Ensure risk profiling tools are fit for purposes and ensure their insistent customer process is robust
  • Adequately document suitability assessments and contemporaneous evidence which has been relied upon
  • Demonstrate periodic review to re-confirm customer suitability

MiFID II will impact on Investment, Private and Retail Banks, Wealth & Asset Managers, Insurance Firms, involving a several financial areas of the organisation: Business Division in terms of advisory service model and product governance, Risk Management in order to monitor portfolio’s composition and customers’ risk level,  Audting & Compliance  to monitor how suitability in executed, Asset Management to verify if investments/disinvestments are suitable for each mandate.

SURE to remain suitable for your clients

To that extent, Objectway has developed SURE, the Suitability Rules Based Engine to match the most suitable product to customers according to his profile.

The multivariate approach compares clients’ profile according to different parameters: experience, knowledge of financial products, liquidity, time horizon, risk, financial position; allowing tracking and storage of information involved in the suitability process. Thanks to the centralised management of compliance issues, the engine can comply with the country-specific regulation and its multivariate rule system that can be easily customised according to the market and financial institution’s needs.

SURE supports firms to perform real-time suitability check in an automated way, but also in terms of portfolio monitoring/rebalancing to assure the continuous suitability.

Automate your compliance checks, strongly reduce your reputational risk or legal claims and focus on your core business activities.

SURE is easy to integrate within your IT legacy system, thanks to an engine approach providing services that could be trigged from third party applications, a real-time data integration adapter and an easy configuration console for the continuous business rules and risk engine update.

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