The regulatory and technical requirements resulting from the introduction of MiFID II and the PRIIPs Regulation at the beginning of the year for structured securities were successfully implemented by issuers of structured securities and structured products. The figures published today by the German Derivatives Association on market volume show that, despite the weakness of the DAX, the outstanding market volume increased by around 3.8 per cent from EUR 68.8 to 71.4 billion in the five months to the end of May.
As Andrea Korte, Managing Director of factor-i GmbH Zertifikatefabrik, explains: “This is due to successful new business, which would not have been possible if issuers of structured securities had not met the new requirements in time. The combination of legal and technical aspects led to the fact that these were the biggest adjustments in the issuing process for many years”.
In Germany, for example, the previous Produktinformationsblatt, (PIB, in English: product information sheet) has been replaced by a so-called Key Investor Document (KID) and Basisinformationsblatt (BIB, in English: basic information sheet) which also contains complex theoretical scenario analyses. MiFID II also requires a target market definition for each security, which is to be defined by the issuer and must be available immediately via corresponding interfaces in the systems of banks, savings banks and online brokers.
“MiFID II and PRIIPs are the blueprint for the regulatory requirements of the future. LegalTech and RegTech, like FinTech, are key elements in the development of the financial industry,” says Andrea Korte.
Statistics of the German Derivatives Association (DDV) on market volume