FINVUS Products

RegTech solutions

Best Execution Monitoring Tool

Best Execution is a key component of the Markets in Financial Instruments Directive (MiFID) II and refers to the responsibility all European Union (EU) investment firms, including Cyprus Investment Firms (CIF), have when it comes to executing client orders. Further, Best Execution mandates that all EU investment firms must take all sufficient steps to obtain the best possible result when executing client orders.

 

MiFID II was introduced in 2018 to further enhance investor protection, increase market transparency, and ensure the smooth operation of the European financial markets. As such, MiFID II is the main legislation that EU investment firms, such as CIF, must follow to achieve regulatory compliance.

 

To help Cyprus Investment Firms comply with Best Execution under MiFID II, the team at FINVUS has developed the FINVUS Best Execution Monitoring ToolTM. The FINVUS Best Execution Monitoring ToolTM has been designed to monitor how efficiently client orders are executed and provides insightful metrics on:

  • Number of orders incurred slippage at open and at close, along with the respective % of all orders executed,
    1. number of orders with negative and positive slippage,
    2. average slippage, and
    3. analysis on the relevant metrics filtered by the user, by day, by class, by symbol
  • Speed of execution of client orders,
    1. month-by-month comparison, and
    2. analysis on the relevant metrics filtered by the user, by class, by symbol
  • Spread open vs close and identify whether an asymmetric spread is offered when executing client orders,
  • Spread at execution vs requested client orders,
  • Number of rejected orders, against the % of all orders executed and the reason for rejected orders.

In addition to monitoring the above metrics, the FINVUS Best Execution Monitoring ToolTM will help CIF successfully prepare the annual RTS 28 summary report on how the firm executed client orders during the previous year, as well as for an inspection by the Cyprus Securities and Exchange Commission (CySEC).

Resolution Reporting for the Central Bank of Cyprus

Resolution Reporting is an annual regulatory reporting obligation certain Cyprus Investment Firms (CIF) have to meet in order to achieve regulatory compliance with the Central Bank of Cyprus (CBC). At the European Union (EU) level, the directive governing the CBC’s Resolution Reporting Regulation is known as the Bank Recovery and Resolution Directive (BRRD) which has been in force since 2014.

 

National Competent Authorities (NCA) such as the Central Bank of Cyprus, are required to transpose all EU legislation into national regulation. Hence, the CBC has transposed the BRRD into Cypriot law which is known as the Resolution of Credit Institutions and Investment Firms Law of 2016 (Law 22(I)/2016).

 

As part of the CBC’s Resolution Reporting Regulation, a CIF subject to capital requirements of €750,000 is required to submit the CIR package. The European Commission Implementing Regulation (CIR) lays down the European Banking Authority’s (EBA) technical standards concerning the procedures, forms, and templates required for the provision of information on resolution plans for credit institutions and investment firms.

 

Each year, EBA announces the applicable taxonomy for the submission of the CIR package. Cyprus Investment Firms subject to the €750,000 minimum capital requirement, are mandated to submit the CIR package in XBRL format. Further, the CBC may request additional information to be provided and this is usually requested to be provided in Excel format.

 

At FINVUS, our regulatory technology tool is updated based on the latest taxonomy outlined by the EBA which makes the Resolution Reporting obligation a seamless experience for Cyprus Investment Firms. Further, the XBRL and any add-on file shall be submitted through the CBC portal.

CRS & FATCA Reporting

Since 2014, the Common Reporting Standard (CRS) and the Foreign Account Tax Compliance Act (FATCA) are annual regulatory reporting obligations that Cypriot regulated financial institutions must comply with. Further, both the CRS and FATCA have been inducted by Cyprus to enhance international tax compliance.

 

The CRS is a globally adopted standard that facilitates the automatic exchange of financial information in other EU Member States. In contrast, FATCA is responsible for improving the reporting and compliance measures of U.S. taxpayers that hold accounts or other financial assets internationally. Hence, U.S. taxpayers that are engaged with CySEC or CBC regulated entities such as Cyprus Investment Firms, Crypto-Asset Services Providers (CASP), or Payment and Electronic Money Institutions (EMI) must comply with the provisions of FATCA.

 

Moreover, through FINVUS we are able to help CySEC and CBC regulated entities meet their annual CRS and FATCA regulatory reporting obligations. The FINVUS platform helps automate and prepare the CRS and FATCA annual reports in XML format for submission through the Ariadni portal.