Time is ticking. PRIIPs- Regulations becoming mandatory starting Jan 2025

Fundamental change in the calculation of transaction costs: the Arrival Price Method will becomethe standard in 2025

The Arrival Price Method, to be implemented in PRIIP KIDs from the end of 2024, replaces estimated values with actual arrival prices determined at the time of placing an order in the market. Commencing from January 2025, this methodology will be the standard for determining transaction costs, ensuring enhanced transparency and comparability in investment product costs.

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With LPA, the leading partner in the industry, you are already prepared yesterday:

Compliance out of the box

Depening on the circumstances, we support Slippage and several fallbacks to Basis Points and Hybrid methods ensuring compliance

Arrival Prices

We advise on the procurement of precise execution time information and help with the efficient processing of market data

Coverage Check

We assist you with coverage check to ensure we can find the most relevant market provider for an optimal coverage during the implementation project

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The PRIIPs-Regulations: The challenges that will arise

The Arrival Price methodology introduces challenges to the Asset Management industry, including the shift from Basis Points to Full PRIIPs Methodology, the need to adapt to a comprehensive evaluation of explicit and implicit costs, and the complexity of determining Arrival Prices based on timestamps from 3 years back.

Basis Points vs. Full PRIIPs Methodology:

The transition from the traditional Basis Points method to the Full PRIIPs methodology poses challenges in adapting existing processes to the more comprehensive regulatory approach.

Adapting to Full PRIIPs Methodology:

The new methodology demands a holistic and dynamic approach to the evaluation of explicit and implict costs. For Fund of Funds, additionally, external fund costs need to be included and their impact considered.

Timestamp-Based Arrival Prices:

Determining Arrival Prices based on timestamps adds complexity, relying on accurate details of the transaction's date and time, considering market conditions and liquidity at the execution moment.

Further technical details:

The Arrival Price Method, to be implemented in PRIIP KIDs from the end of 2024, replaces estimated values with actual arrival prices determined at the time of placing an order in the market. This method incorporates historical tick data and necessitates a transparent set of rules for diverse asset classes. In cases where data is lacking, a guideline-compliant estimate must be used, aligning with Regulatory Technical Standards (RTS) guidelines.

Risks of product unavailability:

Investment management companies are anticipated to implement changes from the second half of 2024. They risk product unavailability from the beginning of 2025 without compliant regulatory documents.

Our Solution: CAPMATIX AM

Document and workflow automation

Document and workflow automation technology specifically for financial institutions. Accelerate your digital transformation process with our configurable software modules that integrate seamlessly into your digital infrastructure. Get your needs fulfilled by choosing Self-Service in our modern SaaS dashboard or rely on us in a Managed Services setup.

Client Data

LPA standard AMT, Client data concierge

Market Data

IHS Markit, THE ICE, Refinitiv

3rd Party Data

MorningStar

Data Management
Calculation

Slippage Methodology - Use of Arrival Prices Mandatory from 1st January 2025 for all PRIIPs

Basis Point Method - Use of Spreads Only for New PRIIPs from 1st January 2025

+ Client Documentation + Report Dashboard + Data Check + Monitoring
Distribution

E-Mail Service
File delivery (SFTP)
Websites
Distribution Reports

Managed Services

CAPMATIX - part of a holistic solution

Sp
Structured Products

Automation of the output process for KIDs, brochures, term sheets, certificates and more for customers and authorities.

PRIIP KIDs Issuance Automation Brochures & Prospects Final Terms Term Sheets Interactive, Websites & in App Docs
Otc
OTC Suite

Advanced trading technology, comprehensive product coverage and market expertise from the pre-trade to the post-trade phase.

Interactive, Websites & in App Docs Trading Post-Trade Costs & Charges Term Sheets PRIIP KIDS Digital Consulting
Am
Asset Management

Automation of European and local regulatory reports through software or managed services.

PRIIPs – MiFID, EPT, KID, EMT, TCC SFDR AIFMD (Annex IV) Solvency II, TPT, SCR CRR II, VAG, Solva, GroMiKV

With LPA, the leading partner in the industry, you are already prepared today:

Already ready to go

Don't wait until its too late. Capmatix is Ready to go live NOW

Industry expertise

One platform to scale your business across Europe

All in One

Multilanguage and multi-jurisdiction technology/reporting platform

Regulatory watch

100% compliant covering all changes in regulation

Data-Management

+100 Million KIDs generated with Capmatix. 800k PRIIPs calculation each day.

Business analytics

Project management and business analytics.

Who we are:

LPA is changing the way financial markets work around the world. We balance our clients' workloads by synergistically combining software, automation and new technologies to deliver a dynamic and innovative financial services ecosystem.

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With over twenty years of experience in the market, 350+ employees and over 180 clients LPA is the leading provider of smart technology solutions in the financial industry.

You have further questions? Let's answer them.

When does the Arrival Price Method apply to PRIIPs?

The arrival price method will be mandatory from 1 January 2025. Early implementation in your processes will ensure legal compliance as soon as the regulation comes into force.

What is the background to the changes to the Arrival Price Method?

Specific transaction costs must be stated within the PRIIP KIDs. Currently, capital management companies have the option of estimating these costs approximately using the MiFID or estimation method instead of calculating them at great expense. The shift aims to foster cross-product comparability and mitigate the discrepancies introduced by varied estimation methods.

How does the Arrival Price Method for PRIIPs work?

The Arrival Price Method, to be implemented in PRIIP KIDs from the end of 2024, replaces estimated values with actual arrival prices determined at the time of placing an order in the market. This method incorporates historical tick data and necessitates a transparent set of rules for diverse asset classes. In cases where data is lacking, a guideline-compliant estimate must be used, aligning with Regulatory Technical Standards (RTS) guidelines.

Why should you switch to Capmatix now for the creation of your PRIIP KIDs?

Integrate the new regulations into your system with us now. We guarantee 100% compliance, including project management, business analytics and many other tools. Work directly with us as the market leader and benefit from our extensive expertise and top-quality service.

What will change with the Arrival Price Method for PRIIPs?

The changes have the greatest impact on three types of market participants: Reporting providers will have to comply with the new standard and prepare their licences, databases and IT accordingly. Asset management companies will be affected next and are expected to start implementing the new requirement in earnest from the second half of 2024. Finally, asset managers are the third affected party, as they may not be able to sell products from the beginning of 2025 if no regulatory documents are available.

What is Capmatix?

Capmatix is a software framework to automate workflows and documentation for OTC derivatives, structured products, complex contracts and asset management. Capmatix for Asset Management has the capability to generate all necessary reports and conduct calculations to ensure your full compliance

Can I arrange a free demo?

You can arrange a non-binding demo appointment at any time. If you seek more information on LPA's Capmatix AM solution and services, please feel free to reach out. We are eager to collaborate with you.

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If you seek more information on LPA's Capmatix AM solution and services, please feel free to reach out. We are eager to collaborate with you.

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