MiFID II Costs & Charges

MiFID II Costs & Charges

Case Study

MiFID II Costs & Charges

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Customer Challenge

A tier 1 bank needed to interpret, define and implement ESMA requirements as relates to MiFID II costs & charges, and inducements. The regulation was open to wide interpretation, differing significantly across business lines and the nature by which the business was executed. Industry working groups had not resulted in consensus across market peers, due to the sensitive nature of the information being disclosed amidst stringent competition law. Ex-post disclosure statements were not due until over a year after the headline MiFID II implementation deadline hence there was a risk of de-prioritisation and withdrawal of project resources and funding.

How Citihub Helped

Citihub was tasked with the scoping and delivery of the project to deliver MiFID II Article 50 reporting across the client’s Global Markets and Retail divisions, whereby investment firms must “provide annual ex-post information about all costs and charges related to both financial instruments and ancillary services where they have recommended or marketed the financial instruments, or, where they have provided the client with the KID/KIID in relation to the financial instrument and they have or had an ongoing relationship during the year.”

Whilst the regulation came into effect on January 3, 2018, the deadline for ex-post MiFID II costs & charges disclosure statements for investors was not until April 30th 2019, hence maintaining a consistent presence through our team of SMEs was vital to ensure that the focus was retained on this important element of the MiFID II reporting requirement.

Citihub’s deep understanding of global markets & traded products, coupled with the application of best practice in programme management and analysis, allowed us to structure and deliver a complex programme of work for one of the largest Global Investment Banks in the world to the highest standard within a significantly constrained budget.

Working alongside client SMEs and relevant National Competency Authorities (NCA’s), Citihub documented and implemented solutions for cost capture, calculation & reporting across all traded asset classes.

Results

The client was able to achieve MiFID II Article 50 compliance across their wholesale and retail divisions

This was achieved through:

  • aggregation and processing of investor and product data
  • identification and collection of the underlying product cost information
  • calculation of ex-post cost information per investor to produce statements

The client was also able to enhance their existing trade booking processes through the lessons learned and applied from the project best-practices.

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