MiFID Client Classification

Driving Client Classification with Effective Processes

The European Union's Markets in Financial Instruments Directive (MiFID) aims to protect investors in relation to trade transparency and best execution. It requires that procedures be put in place to classify clients and assess the suitability of investment products sold to them.

Clients of financial institutions have different levels of knowledge, skill and expertise. Under MiFID investors can be classified in three ways:

• eligible counterparties,
• professional clients and
• retail clients.

MiFiD Client Classification requires financial institutions to provide appropriate levels of protection to investors in each client category.

Investment organisations must assess and classify each new client and provide reasonable assurance that the client has the expertise to make their own investment decisions and understands the risks involved. Investment firms are also required to reassess and reclassify existing clients where necessary.

Singularity uses our best-in-class business process management (BPM) technology and our unparalleled expertise in Capital Markets process automation to provide a comprehensive Client Classification solution. The solution combines flexible workflow with customizable business rules, making it easy to automate complex compliance monitoring and enforcement. Classification tasks are automatically scheduled and work is routed to the right people at the right time, compliance breaches are caught and highlighted to those responsible and a single view of the client is maintained at all times.

Benefits:

• Avoidance of sanctions - an effective approach to Client Classification will avoid financial penalties, costly remedial programs and other sanctions that regulators can impose for non-compliance
• Reduction in 'Compliance Overhead' - the implementation of an efficient solution ensures that customer on-boarding, Anti-Money Laundering, trade reporting and other processes all become more efficient too
• Integrated Compliance - a comprehensive Client Classification solution ensures that client data is properly managed and compliance processes are integrated to the institutions' other client-related activities
• Platform for Customer Centricity - an automated client monitoring and classification solution can become the first step in developing a customer-centric organisation that delivers better returns to all stakeholders


For more information download the MiFID Client Classification brochure below