When FinDatEx validated the third version of the European MiFID template on 10th of December 2019, it started a year-long transition period during which asset managers and distributors were expected to prepare for the new EMT. With the deadline now only a few days away, most asset managers should be ready to provide their EMTs in version 3 and here are five things you should be double-checking this week.
- Check that no changes were missed during the upgrade
There are significant differences between the two versions:
- New Section. Create new section in EMT 3.0 production, define new data points for mandatory fields and decide on population for optional fields
- New fields. Define new data points for mandatory fields and decide on population for optional fields
- Name changes on existing fields. Establish field name translation between EMT 1.0 and EMT 3.0
- Requirements changes on existing fields. Identify impact of requirement changes on existing EMTs and decide on actions
- Allowed value changes on existing fields. Identify impact of requirement changes on existing EMTs and decide on actions
Here you can find the links to the official EMT 3.0 template from the FinDatEx website (European MiFID Template – Version 3.0.xlsx) and the field comparison with EMT 1.0 (European MiFID Template – Comparison V3 vs V1.xlsx).
- Check that your current target market definitions remain valid
Alongside identifying and correcting any inaccurate and missing data, it is imperative that further conversions, for example, into Openfunds and WM data mapping, are implemented too. Compared to the EMT version 1 certain target market definitions will become invalid under 3.0 so it is important that every business understands the individual implications of this.
At Kneip we checked over 60,000 ISINS of the EMT V1 and found that the change in Target Market definition impacts one out of four asset manager, and 40% of their related scope.
- Check your EMTs for compliance
Once you’ve made all the changes, and your EMTs are upgraded to version 3, we advise you to put them to the test. At Kneip our experts are on hand to check your EMTs and either confirm that they are compliant, or point out which fields need upgrading. It’s completely free and you get a report within a few hours. Take the test here.
- Check in with your distribution network
Whilst not a regulatory deadline, failing to produce a report in the version and format requested by a your distribution network, such as your distributors could in the worst case lead to the delisting of your funds. At Kneip we work with about 200 media vendors, and we know that by now – except one – all vendors where we deliver Mifid data to are ready to consume version 1 and 3 as separate files. In addition, over the past weeks we have been receiving an increasing number of requests to fund manufacturers to provide version three, or at least by when they will be in the position to do so. There is no generic answer to whether vendors and distributors will accept EMT 1.0 beyond 10 December 2020. It really depends on your distribution network: some recipients will adopt a hard cut-off date for version 1, some will wait until a full market adoption for version 3.
- Check that your operational processes are robust
Despite the deadline fast approaching, many asset managers and manufacturers are still not ready and there is a whole host of work to do. According to a recent Kneip survey, a quarter of fund manufacturers plan to only be ready in Q1 2021. It is very likely that for many, EMT version 1 is not going away on Thursday and that both version of the EMT will continue to be produced in parallel. This duplication can impact operations, fund sales numbers, result in a greater number of errors which could lead to potential client loss, and also adds additional time pressures.
For more information about EMT 3.0, visit www.kneip.com/emt3