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Interview: ACOLIN Distribution Network Management’s special update on European MiFID Template (EMT) 3.0

By Aleksandar Kozacenko

Original interview appeared in FundPlat in German on 12.06.2020 by Aleksandar Kozacenko - Link to the Interview.

Why is there a new EMT template and who will be affected with this update?

European MiFID Template (EMT) is a MiFID information exchange template jointly designed by product manufacturers (i.e. asset managers) and distributors as part of FinDatEx’s MiFID working group. Since January 2018, EMT has been successfully used to standardise the flow of information on target market, distribution strategy and costs & charges between product manufacturers and distributors.

The European Fund and Asset Management Association (EFAMA) continued gathering feedback from the industry, intending to remove any ambiguities present in the original EMT 1.0 template (which is still being used). Based on the feedback collected, new EMT 3.0 was created and officially endorsed on the 10th December 2019 by FinDatEx and members of the FinDatEx Steering Group.

Based on the EMT 3.0 update, especially to the fields relating to the target market and distribution strategy product, manufacturer will need to carefully consider their product categorization. On the other side, distributors are now expected to report sales outside the positive target market or within the negative target market. Any such instances should be justified by the individual facts and the reasons for the deviation should be documented.

Is there a transition period between the two EMT templates?

There is a one-year transition period running from 10 December 2019 until 10 December 2020 during which product manufacturers may provide their distributors with both EMT 1.0 and EMT 3.0 templates (if the distributors are ready to receive the new template).

ACOLIN’s survey of distribution partners shows that distributors are in the process of analysing the implementation of EMT 3.0 and, at least at the moment, have no intention yet to request the delivery of the new template until the end of the transition period. To meet different distributors’ requirements, ACOLIN recommends starting to disseminate both EMT 1.0 and EMT 3.0 throughout the entire transition phase, until all selected distributors have switched to the new version.

What are the differences between EMT 1.0 and EMT 3.0 templates?

There are several differences between the EMT 1.0 and EMT 3.0 templates. These differences will need to be reviewed and understood, as they can have a significant impact on the quantity and quality of MiFID data being disseminated to your selected audience i.e:

  • Number of the fields has been increased from 66 in EMT 1.0 to 94 fields in EMT 3.0
  • More than 30 new fields have been added throughout the template
  • Certain fields have been discontinued, had their names or field type changed, or both
  • EMT 3.0 allows for individual section updates as each section now contains a record date
  • All ongoing ex-ante and ex-post costs must be reported in annualised terms regardless of the existence
  • New ESG and a few specific country fields have been added

What to consider in MiFID Dissemination?

Dissemination of MiFID (EMT) data is often underestimated in terms of complexity as frequency and delivery can vary from one recipient to another. As such, asset managers need to carefully consider their EMT dissemination and deliver correct, complete and up to date data to their selected list of recipients.

Are you ready for EMT 3.0 template and this update?

To successfully implement EMT 3.0 following questions should be considered by asset managers:

  • Have we received a copy of endorsed EMT 3.0?
  • Who internally or externally is reviewing EMT 3.0 on our behalf?
  • Are we aware of the changes introduced in EMT 3.0?
  • Have we checked Target Market Definitions and adjusted them to EMT 3.0 specification?
  • Can we produce EMT 3.0 in various formats (CSV, XLSX)?
  • Can we disseminate the same ISIN in EMT 1.0 and EMT 3.0 to our distributors?

How can ACOLIN help?

ACOLIN is the only globally active provider of cross-border fund distribution services that operates independently of banks. The comprehensive range of services offered by ACOLIN enables internationally active asset managers and fund companies to gain swift and straightforward access to the most important global financial markets in the EU, Switzerland, Asia and Latin America. Headquartered in Zurich, ACOLIN has subsidiaries and branches in Belgrade, Dublin, Frankfurt, Geneva, Constance, London, Milan and Madrid.

Worldwide, ACOLIN services over 600 asset managers and 1800 funds from over 30 jurisdictions with its comprehensive tailormade distribution solutions, encompassing: Representation Services, Distribution Network Management (DNM), Global Fund Registration, Online Publications, Tied Agent Service and GDPR Representation.

As part of ACOLIN’s Distribution Network Management (DNM) service, our clients have access to ACOLIN’s extensive expertise in global product distribution and to ACOLIN’s highly valued and personalized Data Management service. ACOLIN’s Data Management service includes the collection, validation, processing, and dissemination of static (master) and regulatory (MiFID and PRIIPs) fund information on behalf of our clients to their selected list of Distribution Partners. So, if you are not yet our DNM client, why don’t you give us a call and see how you can also benefit from our distribution know-how and access to our DNM network?

ACOLIN is planning to hold an online presentation on EMT 3.0 and distribution topics, in case you are interested to participate, or have any questions/ comments please do not hesitate to get in touch with us:

Aleksandar Kozacenko Head Data Strategy and Governance

aleksandar.kozacenko@acolin.com +41 79 907 4441

ACOLIN is a founding member of Openfunds initiative, associate members of EFAMA, ALFI, SFAMA, Irish Funds Association and AFBS (Association Foreign Banks in Switzerland).

About the author: Aleksandar Kozacenko is a seasoned professional with more than 20 years of experience in financial services' sector having worked for major International data vendors: S&P Micropal, Morningstar, Refinitiv and FE Fundinfo. He is a Member of the Group Executive Committee and Head Data Strategy & Governance at ACOLIN. Aleksandar's role is focused on data strategy & quality, establishment of operational procedures and representation of ACOLIN at industry bodies and events.

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