As MiFID II looms, retail FX firms have to consider their approach to regulatory technology and structure, in order that they can comply with trade reporting and repository requirements and the means by which firms must design their topography
No longer is the Eastern Mediterranean island of Cyprus considered to have the sole functionality of acting as a hub for retail FX brokerages from across the world to place CySec licensed operations in order to align themselves with the European MiFID regulations and thus attract clients to a credible entity.
Far beyond the inaugural days that laid the foundations for Cyprus’ now fully comprehensive FX industry, the country now plays host to the major platform providers Spotware Systems and MetaQuotes, developers of the cTrader and MetaTrader platforms respectively, liquidity management companies oneZero and PrimeXM also have operations on the island, institutional prime brokerages and liquidity providers operate in Cyprus, as do management consultancies and regulatory technology and trade reporting specialists.
This is now a manifestation of the established status of Cyprus as a mainstay of the mechanics and infrastructure that powers the global retail FX industry, however there is now a further major evolution that has clearly demonstrated that Cyprus is ready for its next move in the upward direction and onto the world stage of the institutional and exchange listed derivatives sector, not just in terms of sales and distribution, but also in terms of market infrastructure development and technological topography.
In order to lead the retail FX industry as a holistic center for the entire business and its structure, Cyprus must become a recognized point of development for regulatory procedure, regulatory technology and above all, discussion among senior level leaders of the regulatory sector.
Today and tomorrow, in Nicosia and Limassol, post-trade execution, operation, processing and reporting company Point Nine will be hosting breakfast meetings in Nicosia and Limassol in order to assist in the preparation and provision of information to firms in Cyprus that are making themselves ready for the implementation of the Europe-wide MiFID II directive which is scheduled for implementation in January 2018.
FinanceFeeds will report in full with regard to the discussions that take place, and with regard to the important points raised.
As is to be expected, Point Nine will use this opportunity to demonstrate its own automated system for post-trade transaction and trade reporting requirements under MiFIR as well as to outline instrument eligibility under MiFIR, and take a comprehensive look at connectivity to approved reporting mechanisms (ARMs) approved publication arrangements (APAs) and examine post-trade best execution reporting requirements under MiFID II
With less than 9 months to go until the introduction of MiFID II/MiFIR in the EU, this new regulatory framework is still one of the greatest challenges that faces the retail financial industry. MiFID II is a complex infrastructural framework and to achieve compliance with it a great deal of time and resources is required.
Point Nine co-founder and Chief Technology Officer Pavlos Christoforou, who established the firm in Cyprus alongside Yannis Matsis in 2002, recently addressed officials from firms ranging from CME Group’s trade depository and clearing division to KPMG, and CySec Chairman Demetra Kalogerou with regard to RegTech on the cloud, and how the hosting of regulatory technology in an infrastructure-free environment poses challenges and opportunities.
Retail FX firms have always had to remain ahead of the technological development cycle in order to continue to provide their value proposition globally in the face of fast moving retail markets and establish themselves against very strong competition, however these days the regulatory aspect of the business is a technological and in many cases automated procedure, thus companies have to fully understand the new and impending infrastructure directives in order to implement their systems correctly.
FinanceFeeds will provide a full report on this later this week.