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cBuy Generic 1.6

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Amrish Ganatra

on 12 September 2018

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Transcript of cBuy Generic 1.6

The Company
Commcise is formed by buy-side industry and technology experts.
Over 75 man years of development has got us to where we are today
Commcise is a fully integrated Software-as-a-Service based solution.
Commcise is designed to meet the needs of Global customers
Commcise aims to be the golden source of precise commission data. Data quality is paramount.
Commcise is a private employee owned independent firm.
Commcise is a buy-side focused software vendor.
Copyright Notice
© COPYRIGHT 2013 Commcise LLP. All rights reserved. This document is unpublished and the foregoing notice is affixed to protect Commcise LLP in the event of inadvertent publication. No part of this document may be reproduced in any form, including photocopying or transmission electronically to any computer, without prior written consent of Commcise LLP. The information contained in this document is confidential and proprietary to Commcise LLP and may not be used or disclosed except as expressly authorized in writing by Commcise LLP. Copyright protection includes material generated from our software programs displayed on the screen, such as icons, screen displays, and the like.

Trademarks
Technologies described herein are either covered by existing patents or patent applications are in progress. All brand and product names are trademarks or registered trademarks of their respective holders and are hereby acknowledged.

Confidentiality
The information in this document is subject to change without notice. This document contains information that is confidential and proprietary to Commcise LLP and may not be copied, published, or disclosed to others, or used for any purposes other than review, without written authorization of an officer of Commcise LLP. Submission of this document does not represent a commitment to implement any portion of this specification in the products of the submitters.

Content Warranty
The information in this document is subject to change without notice. This document is provided “as is” and Commcise LLP makes no warranty, express, implied or statutory, including but not limited to all warranties of merchantability or fitness for a particular purpose. Commcise LLP shall not be liable for errors contained herein or for incidental or consequential damages in connection with the furnishing, performance or use of this material.

For more information, please contact:
Commcise LLP
60 Cannon Street,
London
EC4N 6JP
info@commcise.com
Legal Notice
Commcise is a cloud-based Commission Management and Commission Wallet reporting solution built to meet the
needs of Investment Managers
. Commcise enables Investment Managers to understand the total value of their research provider relationships by providing a single
integrated
platform that supports Reconciliation, Invoice Management, Commission Budgeting, Broker Voting, Consumption Tracking, Commission Management and Reporting all by
Dynamic Research Pools
.
What makes Commcise different?
Commcise offer a software based solution in the cloud (not an Aggregator)
Commcise is a fully integrated solution by design
Commcise is independant and broker neutral; buy-side clients appreciate this
Commcise is designed for the needs of the buy-side; this seperates us from our competitors
Commcise is designed for global clients
Commcise provides a complete audit trail that details how client commission balances are managed
Commcise charge a single annual fee per each connected party
Replace manual email and spreadsheet based processes
A transparent fully audited solution for managing client commission balances
Fully automated reconcilliation process with the buy-side
Secure, globally available web-based platform making it easier to employ resources in global offices for redundancy or primary use
Terms of business tracking helps prevent paying commission accidently
Online account balance tracking and bank account reconciliation results in fewer requests from the buy-side
Commcise allows any sell side to offer aggregation services to their clients
How does the sell side benefit?
Commcise allows sell side firms to participate in the broker vote process
Commcise allows sell side firms to offer a best-of-breed solution to their clients
Commcise includes commission targeting functionality that can be compared to awards made as part of the broker vote
Commcise has built a configurable rules engine that can be shared between the buy-side and sell-side firms
What makes Commcise different?
Commcise offer a software based solution in the cloud (not an Aggregator); Commcise virtually aggregates commissions.
Commcise is a fully integrated solution by design
Commcise is independant and broker neutral; buy-side clients appreciate this
Commcise is designed for the needs of the buy-side; this seperates us from our competitors
Commcise is designed to support global clients
Commcise provides a single complete audit trail that details how client commission balances are managed
Replace manual email and spreadsheet based processes
A transparent fully audited solution for managing client commission balances
Fully automated reconciliation process with the buy-side
Secure, globally available web-based platform making it easier to employ resources in global offices for redundancy or primary use
Terms of business tracking helps prevent paying commission accidentally
Online account balance tracking and bank account reconciliation results in fewer requests from the buy-side
How can Commcise Sell help
the sell-side?
Commcise allows sell side firms to offer a best-of-breed solution to their clients
Commcise has a robust fully configurable unbundling solution (Rules Engine) that can support the most complex buy-side and sell-side requirements
Commcise allows buy-side firms to instruct and track invoice payments
How do RBC clients benefit from Commcise SELL?

Commcise
SELL
portal provides your CSA clients with
:
a
transparent
commission management solution
automated
trade reconciliation
ability to see their
real-time commission balances
.
ability to
virtually "pool" CSA balances

ability to
record invoices
for payment
automated
notifications
when payments are instructed
demonstrable
best practice
management over client commission balances to the
regulators
and end clients.
Rapid
onboarding of new clients
The Commercial Proposal
Pricing designed to "grow together"
All modules included
Includes hardware, upgrades and support
Minimal implementation effort required
Simple pricing model
Incentives for sell-side firms promoting the service to their customers
The Commercial Proposal
Simple discounted pricing model
Modules can be introduced over time
Includes upgrades and support
Minimal implementation effort required
Responsive to regulatory change
What makes Commcise different?
Commcise offer a software based solution in the cloud (not a physical Aggregator); Commcise virtually aggregates and accounts for commissions.
Commcise is a fully integrated solution by design
Commcise is independent and broker neutral; buy-side clients appreciate this
Commcise is designed for the needs of the buy-side; this seperates us from our competitors
Commcise is designed to support global clients
Commcise provides a single complete audit trail that details how client commission balances are managed
Replace manual email and spreadsheet based processes
A transparent fully audited solution for managing client commission balances
Fully automated reconciliation process with the buy-side
Secure, globally available web-based platform making it easier to employ resources in global offices for redundancy or primary use
Terms of business tracking helps prevent paying commission accidentally
Online account balance tracking and bank account reconciliation results in fewer requests from the buy-side
How can Commcise Sell help
RBC?
Commcise allows sell side firms to offer a best-of-breed solution to their clients
Commcise has a robust fully configurable unbundling solution (Rules Engine) that can support the most complex buy-side and sell-side requirements
Commcise allows buy-side firms to instruct and track invoice payments
Our vision for the future
What makes Commcise different?
Commcise offer a software based solution in the cloud (not an Aggregator)
Commcise offer a fully integrated solution today
Commcise is independent and broker neutral; incentivised to improve transparency
Commcise is designed for the needs of the buy-side
Commcise is designed for global customers
Commcise provides a complete audit trail that details how client commission balances are managed
Commcise have a simple charging model
not calculated per seat
Commcise employ an Agile development model with an innovative product roadmap
Commcise considers all your data accross all brokers and asset types
Commcise manages commission reporting and CSA pools by investment team
Commcise includes a flexible fully configurable Rules Engine to support complex unbundling rules
Commcise removes manual spreadsheets by automating payment instructions
Commcise includes a dynamic commission budgeting module which is integrated with BV
Commcise offers real time commission forecasting capabilities
Commcise includes a robust accounting engine that provides real time transparency of cash balances held with brokers
We believe Commcise is the most regulatory compliant platform on the market - mixed use support
Commcise enables buy-side firms to capture research events and view this within their broker vote
Commcise provides flexible event based notifications engine - improves transparency over invoice payments.
Commcise offers the most secure platform of its peers - virtual private cloud; 2FA; encyption at rest
Commcise's provides a single audit trail end-to-end
Commcise offer a terms of business engine to helps prevent paying commission accidentally
Traders
Compliance
Finance
CSA Manager
Operations
Senior Management
Fund Manager
Others also think we're different....
What regulatory changes are coming to Europe?
Buy-side firms:
1. Can pay for research out of their own P&L, or
2. Can pay for research from a ring-fenced Research Payment Account (RPA)
RPA usage is subject to the following conditions:
RPA is controlled by the Asset Manager
RPA is funded by a specific research charge to the client [not fund]
[FIRM LEVEL] This charge must be based on a research budget set by the investment firm
[CLIENT] The charge must
not
be linked to volume or value of trading
[REMOVED] The frequency and size of this charge must be agreed with the 'client' in advance
[REMOVED] Any increase to the agreed budget must be agreed in writing
[FIRM]
Unutilised budget can be rolled over or returned to the client
Further clarity required on:
Can transactional charges (not linked to value or volume) be used to fund an RPA?
Regulation vs Directive
What is the defintion of Research?
Can a broker manage an RPA for an Asset Manager?
Rules arounding allocation from fund to client
Will Asset Managers need to re-paper agreements?
The exact mechanism for rebating a client [and not fund]
VAT treatment of research payment charge and research procured using an RPA
Will MIFID II be aligned to UCITS and AIFMD?
Will the FCA take a more rigid stance and ban use of dealing commission?
Is the industry agreed on anything?
Full service (bundled commisison) rates are
gone
A detailed research evaluation tool (or broker vote) is expected to be in place
CSAs are a good starting point for firms who haven't unbudled
An asset manager
must
have a robust budget in place
Research expenditure will decrease if asset managers pay out of their own P&L
Greater transparency reporting is accepted
Asset Managers will expect more priced research from their research providers
Unlikely to see a consensus harmonised implementation of MIFID II in Europe (subject to this not being treated as Regulation)
What trends have we seen over the last few months?
Asset Managers moving to execution only rates accross the board
More focus on research budgets
Increased focus on broker or research vote
Increase in the use of CSAs
Increased focus on service history from research providers
Focus on substantive research
Firms looking for outsourced solutions including payments processing
Consideration to fund-level budgeting
Fund level budgets in different base currencies
Ring-fenced client specific research payment administrators
Wait and see approach
Greater C-Level engagement
Greater interest from hedge funds
Increase in the number of RFP requests
So what is Commcise doing now?
Exploring options to use the existing CSA plumbing
Enhancing our commission budgeting module - already at fund level
Enhancing our research evaluation (aka broker vote) module - multi-currency voting
Support for enhanced rating of service history
Investigating FCA authorisation process
iPhone and iPad App for fund manager service history and research evaluation
Identifying best migration approach from CSA to RPA
Asset Type Scope - how to deal with Fixed Income and other asset types
RPA enhancements and automation
[FIRM]
The total amount of research charges received in the research payment account may not exceed the research budget.
[FIRM + CLIENT] Increases in the research budget shall only take place after the provision of clear information to clients about such intended increases.
Will an RPA be subject to client money (CASS) regs?
CSA's (as we know them today) are
unlikely
to exist in Europe post Jan 2017
Can transactions seed an RPA?
How is a RPA different from a CSA?
RPA brokers would need to have a “ring-fenced” client account
A RPA broker would “accept” the research amount declared on any given trade rather than trying to re-calculate this themselves
The amount of “research” commission declared on every trade is a dynamic post trade calculation and not one agreed by the front office.
Research commission amounts would
not
be linked to value or volume
Research commission would be calculated dynamically per trade rather than being agreed upfront weeks or months in advance
Budget constraints will always be respected when determining how much commission to include on a given trade.
CSA’s are not currently commonly used for other asset types
CSA’s currently involve a reconciliation between buy-side and sell-side to determine: (i) rate card issues (ii) eligibility issues (iii) FX rate issues.
Trading desks only determine execution commission rates and all trading is on an executon only basis.
a
Why use transactions to fund an RPA?
Makes use of existing pipework and infrastructure
Enhanced technology can allow this to remain compliant and achieve regulatory objectives (e.g. no inducements)
Model can easily be ported to other asset types (e.g. Fixed Income, FX, etc)
Simplifies migration to an RPA on a global basis – US firms more likely to adopt a transactional model where the Asset Manager strictly controls how much research is included on any given trade.
Allows a hybrid approach for global firms - CSAs (US), RPA's (EMEA), CSAs (Asia)
[CLIENT] The investment firm must agree with clients, in the firm’s investment management agreement or general terms of business, the research charge as budgeted by the firm and the frequency with which the specific research charge will be deducted from the resources of the client over the year.
Who do we compete with and how do we compare?
How will buy-side firms manage research consumption in the future?
existing clients include:

Fees linked to usage of the platform. Base pricing linked to number of users and connected parties
Full transcript