There are different standards for the delivery of MiFID relevant data to distributors. The regulation was originally introduced in 2018 for better investor protection and greater transparency although two years after there are still issues with its format.
For instance, reconciling the European MiFID templates (EMT) with the specifications implemented by WM-Datenservice (German target market concept) has proven problematic.
The deadline to switching from EMT 1.0 to EMT 3.0 is fast approaching and asset managers should be ready to switch MiFID templates.
Lauri Paal, Chief Product Officer at Kneip explains: “The deadline for transitioning to EMT 3.0 is set for December 10, 2020. This new European template for MiFID brings several important changes that fund companies need to be mindful of.
“Currently, asset managers are expected to produce reports in both EMT 1.0 and 3.0 formats, depending on the client’s/distributor’s requests. This duplication can impact fund sales numbers with the resulting increase in errors and lead to potential client loss, and also adds additional time pressures. For asset managers, there is no choice, if they fail to produce a report in the format requested, it carries the risk that they will be delisted.
“For the remainder of 2020, the transition from EMT 1.0 to 3.0 will remain complicated and time-intensive but there are ways to alleviate risk. Teams from across the investment fund must work together, everyone from asset managers to operational teams and management too.
“If not already in place, an EMT 3.0 template must be created and managed in parallel with the 1.0 template until the end of 2020. Alongside identifying and correcting any inaccurate and missing data, it is imperative that Openfunds is updated and WM mapping implemented too. From January 2021, certain target markets will become invalid under 3.0 so it is important that every business understands the individual implications of this.”