European Institute of Management and Finance | MiFID II: Safeguarding Client Money and Assets
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MiFID II: Safeguarding Client Money and Assets

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MiFID II: Safeguarding Client Money and Assets

 

CySEC have implemented the MiFID II Safeguarding of Client Assets provisions reserving the right to be super-equivalent. Article 16 of MiFID II states that “An investment firm shall, when holding financial instruments belonging to clients, make adequate arrangements so as to safeguard the ownership rights of clients, especially in the event of the investment firm’s insolvency, and to prevent the use of a client’s financial instruments on own account except with the client’s express consent”.

 

Consumers risk the potential loss of assets when authorised firms default or exit the market. Enforcement actions by regulators have highlighted practices in firm’s which increase the risk of mismanagement and fraud. Poor records and ineffective segregation procedures create a slower, costlier and more uncertain outcome for the customer and associated reputational damage to European markets. This risk is increased during a recession or uncertain economic climate.

 

National Competent Authorities (NCAs) are increasingly putting pressure on firms to provide assurance that the firm’s clients are adequately protected and demonstrate compliance through the oversight controls ensuring that they are understood and implemented.

 

This workshop will provide delegates with an overview of these changes, impact assess what these requirements practically mean for firms and the risks that firms will need to consider in order to maintain compliance with the requirements particularly during times of economic and political change.

 

 

Training Objectives

 

By the end of the programme, participants will:

 

  • Summarise the requirements for Safeguarding of client assets including funds belonging to clients
  • Explain the regulatory concerns regarding client money and assets in respect of insolvency and their relevance to European market integrity, specifically in relation the application of the regime by CySEC
  • Illustrate lessons learnt from Enforcement and the impact of future regulatory changes

 

 

Training Outline

 

Introduction to the Safeguarding of Client Assets

 

Increased consumer detriment can arise when authorised firms default or exit the market. Poor records and ineffective segregation procedures create a slower, costlier and more uncertain outcome for the customer and associated reputational damage to European markets. This session examines the reasons for changes to the regulatory approach including:

 

  • Explanation of the Regulatory requirements under Safeguarding of Client Assets
  • Identification of the key challenges of implementation and how to address operational risks arising
  • Discussion of implications of Client Asset Regulation across European and International Markets

 

Regulatory Requirements and the Protection of Client Assets

 

Firms must provide assurance that the firm’s CASS risks are adequately evaluated, monitored and mitigated. This session examines changes being introduced through MiFID II including:

 

  • Define the IOSCO principles applicable to firms and their regulators which relate to the protection of client assets
  • Present an assessment of the practical implications of your firm’s CASS responsibilities including identification, segregation, maintaining records and controls and performing reconciliations
  • Summarise the requirements including for securities financing transaction and collateralisation, diversification, and 3rd country jurisdictions

 

Firm Responsibility for the Governance of Client Assets

 

MiFID II introduces new requirements for oversight and that controls are both understood and implemented. This session examines the need for the appointment of an oversight officer and other requirements including:

 

  • Demonstrate practical examples from National Competent Authorities (NCAs) enforcement and case studies
  • Explore how firms manage outsourcing risk and due diligence with third parties
  • Explain a framework to practically manage regulatory change within your organization to for meeting regulatory expectation
  • Illustrate an approach to practically manage regulatory implementation within your organisation and the regulatory expectations

 

 

Training Style

 

This workshop is designed to be participative throughout. The agenda will combine key formal presentations, case studies and syndicate discussion sessions. There will be ample opportunity for delegates to benchmark experiences with industry peers and raise issues of most concern to their organisation, either confidentially or in open session.

 

 

Who Should Attend

 

This workshop will be of benefit to anyone who is likely to be affected by the changes brought in by MiFID II – Safeguarding of Client Assets, including senior management, legal, compliance and front-line employees.