With the ever-progressing convergence between physical and financial markets, there has been a growing need to stretch the scope of financial regulations to its various extended markets. After the reforms in the MiFID, the new and improved MiFID II has extended its focus to commodity markets. Commodities exchange refers to the trade of commodities including metals, energy, livestock and agricultural products, from where it is produced to where it is needed. Aligning the G20 agreement to enhance regulation, operations and transparency of commodities markets, MiFID II has introduced several regulations to cover a wider scope of the commodities trading industry which will affect buyers, brokers and venues involved.

One of the biggest enhancements is the introduction of Organised Trading Facilities (OTFs). Within an OTF, multiple third-party buying and selling interests in bonds, structured finance products, emission allowances or derivatives can be traded. This has led to the inclusion of Emission Allowances (EUAs) as financial products. In addition, commodities having “characteristics of a financial instrument” have also been classified as financial products being traded in OTFs. The classification of these somewhat vague products will be determined by the level of standardisation and trade situation of the contracts binding these products.

MiFID II has also altered and removed a few of the exemptions which previously enabled some commodity derivative trading firms to rely on these exemptions to avoid the MiFID authorisation. The “dealing on own account” exemption which relieved firms dealing with commodity derivatives, EUAs or derivatives on EUAs from MiFID authorisation has been heavily reworded to remove a lot of products from it’s scope. MiFID II has significantly altered the ancillary activity exemption as well. The scope of ancillary activity exemption has been narrowed down to qualify only certain types of investment firms that fulfil specific criteria. The commodity dealer exemption, which was tailored for individuals dealing in commodity derivatives has been disbanded as well. In addition, new “specialist exemptions” have been introduced for operators under the Emissions Trading Directive.

Under MiFID II, position limits criteria have been introduced to minimise risks and disorderly trading. ESMA has drafted two Regulatory Stock trading monitor (black and white)Technical Standards (RTS) to brief local authorities on setting the methodology to limit the net position an entity can hold in the market. Similarly, MiFID II has implemented the position reporting requirement which requires commodity traded venues to publicly issue a weekly report of the accumulated positions held by the various categories of position holders within the venue. Interestingly, position reports apply on EUAs while position limits don’t.

With many exemptions being removed, many firms and brokers in the commodity trading industry could now expect additional bureaucracy and costs that didn’t exist before. The reformed ancillary activity exemption has the potential to cause complications for MiFID regulated firms who additionally deal with out of scope products. Similarly, newly introduced position limits and reporting criteria could present buyers and venue operators with numerous constraints. The overall impact on the commodities trading industry perhaps won’t be uniform and will depend on how each entity is structured.



Blockchain: today’s revolutionary technology and the backbone of Bitcoin. Blockchain has recently gained the attention of countless individuals, from banks and governments to fishermen and farmers.

Accepted as one of the most powerful technologies yet, Blockchain stores records with facts verified by everyone through a network of computers, which means it is not only decentralized but is also disturbed. It is not owned by one person, each Blockchain gets automatically downloaded on every node or computer. Using “blocks” of information which are connected or chained to another in chronological order, allows everyone to use it, help run it, and see changes made to it. As everyone can see exactly where an unauthorized change was made and requires them to validate it, it is harder to edit and corrupt. Hackers must access all the computers at the same time and make the exact same change in each node or computer to hack the data.

That means security is guaranteed, right?

Not necessarily. Blockchain has many potential vulnerabilities.

In March 2015, Interpol demonstrated one of these vulnerabilities using the bitcoin network and communicated with a hacker-controlled bitcoin address, extracting information on transaction receipts and introducing unrelated date to transaction into the Blockchain. This unrelated data could be anything, from illegal files to malware.

The Blockchain can thus be repurposed to spread malware, because data is automatically downloaded to all computers which use Blockchain, the malware will not only spread but is also almost impossible to remove as all computers will need to verify this change. A user in 2013 uploaded child pornography sites to the Blockchain, and everyone using Bitcoin had links to this on their computer and they were unable to get rid of it.

Another vulnerability of decentralised and disturbed information is the fact there will be multiple replicates on various computers, meaning it will offer hackers more places to attack. This is problematic when it comes to sensitive information like contracts.

While Blockchain might provide new ways for information security and cutting out the middle man, it can also be repurposed to benefit nefarious activities.


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With only few months remaining till Markets in Financial Instruments Directive (MiFID II) is in put in place across Europe, firms will need to be prepared to implement this new legislation. European Firms will need to apply new measures to meet MiFID II requirements. Are you ahead of the game? Are you ready for MiFID II?

Countless firms will be affected by this legislation which broadens MiFID to capture firms that it previously didn’t. It focuses on number of deliverables which means it will include not only Compliance Staff, Legal Staff, Asset Managers and Investment Firms but also Commodity Firms, Human Resources and the IT Sector.

MiFID II will strengthen the role of management in order to ensure efficient guidance, market integrity and effective protection of the investors. MiFID II includes measures which require committed time, skillful knowledge and experience to understand the markets and firm’s activities, from risks to operation. Diversity will be necessary to avoid biases and to encourage critical thinking and various views, especially employee representation as they will be more familiar with the internal working on the firm.

Firms will need to increase staff responsibility and upgrade technology to ensure they meet MiFID II requirement.

The recent year delay to MiFID II emphasises the amount of work in IT systems that firms need to prepare for the new regulation. Businesses need to carefully consider MiFID II technology solutions. In a short period of time, firms will need to implement technology which can manage the complicated web of regulations that they are faced with. Some of the features that are needed include a transparent platform which trading activities will need to be migrated to, a new customer-facing portal to increase customer interaction and a robust client classification data system.

Upgrading platforms and migrating historical data whilst also ensuring accuracy is a time-consuming process and might lead to further HR demands as employees will need to be trained to use this technology.

The FCA is aware that the later they consult on and finally publish the final rules, the less time businesses have to prepare and implement MiFID II, thus they are facing immense pressure to complete these texts on time and go through European legislative. So far, the FCA is taking initiative and staying “ahead of the game” by publishing various consultation papers, a user guide and the application on their website as well as encouraging local relevant authorities to start taking action.

Our MiFID II workshops are run by delivery experts who can prepare you for MiFID II- click here to find out more. 


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With cybercrime rates skyrocketing over the past years, it is acknowledged to be increasing at an alarming rate, targeting various sectors. In 2015, the legal sector appeared on Cisco’s annual ranking of industries targeted by hackers and for good reason.

As a sector which holds valuable and sensitive material to important individuals and organisations, criminals seek to obtain confidential client information for the purpose of financial gain or espionage, they do this through methods such as malware and other software programs.

Panama law firm, which holds over 11 million documents and reportedly establishes offshore accounts and companies for global power players, was victim of a ‘leak’. The files revealed the names of many world leaders who have established offshore tax havens.

Another reason is that law firms are seen as ‘weak links’ to exploit when seeking a client’s work. Law firms and their access to confidential materials, like a client’s patents, are therefore they are often targeted. For instance, for insider trading purposes, Russian cybercriminal “Oleras” and their gang had targeted 48 of the nation’s most prestigious law firms to steal sensitive client information.

Law practices all hold a huge amount of incredibly important and sensitive market information that hackers illegally seek to use to their advantage and for this reason, they are strongly urged to look at cybersecurity.

Despite these serious threats to the sector, law firms are behind on cybersecurity. While three quarters of employees in law firms with annual turnover above £500m are aware that they are very likely to be target of cyberattacks, research shows that respondents from the legal sector are 18% less likely to include external cyber security experts than non-lawyers in their attack contingency planning.

A large 86% of lawyers see cyber security as an issue for the senior executives, management needs to have a firm stance and clear message to employees and clients regarding preventing, detecting and responding to security breaches in information technology systems. These risks need to be addressed quickly and effectively, because it can cause irreversible reputational damage and disastrous financial losses to a firm and its clients.


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London is well-known as both a global financial hub and a multi-cultural city but what happens when you bring these two things together?

Yielders has become the first Islamic Fintech firm to be fully accredited by the UK’s FCA. The London-based start-up is a crowdfunding property investment platform.

The process is simple and transparent, taking away the hassle of being a landlord or the burden of a mortgage. It allows the public to invest as little as £100 in cash and start earning returns almost immediately on pre-funded assets, providing predefined rental income.

With no debt, no interest, full voting rights and full financial rights, they are also the first UK Company to gain the Sharia compliance certification by the UK Islamic Finance Council (UKIFC).

This doesn’t just emphasis their business ethics, but also demonstrates the increasing role of the UK’s Islamic Finance Sector.

As London seeks to position itself as the global centre for Fintech, extending this to Islamic Finance will not only broaden the number of investors in the UK but will also attract investment from the Middle East and South East Asia.

Yielders is making history and dispelling the myth that traditional Islamic Finance is uncompetitive. Islamic Fintech is expected to grow in demand.


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The success of Finance and technology, known as Fintech, is acknowledged across industries, however Fintech is not the only increasing trend. As technology continuously incorporates itself into the daily insurance service provision, inspiring efficiency and improved service, Insurtech has emerged as a portmanteau of “Insurance” and Technology”. From black boxes in cars measuring driver performance and algorithms in calculating risk profiles of customer to wearables measuring health, Insurtech is predicted to have a great impact on customer experience.

How industry will work?

New insurance companies are looking into possible ways of using technology to assess the risk rating of a client and to monitor them using technology to monitor daily activities of clients.

Despite only 37% of Gen Y reporting that they have positive experiences with their insurance globally, the Insurance sector still contributes over 25% of the UK’s total net worth. With the rise of Big Data, insurance companies are presented with the opportunity to grasp the various platforms to improve their overall efficiency.

According to the FDA, around 1.7 billion smartphone users will be using a mobile medical app by 2018, this is a huge opportunity as environmental sensors connected to devices and wearables, such as FitBits and Apple Watches allow insurers to better manage risk, improve subscriber loyalty and optimize sales opportunities. These devices monitor our health and therefore health insurers can use this assess risk smarter, reducing the premium for those who are healthier for instance and improving the overall economy.

Blockchain can also help secure the data of customers, ensure that insurance history and transaction is kept safe.

Impact on Insurance Industry

Despite this industry being new, it is predicted to have a greater impact on customer experience with insurance claiming time reduction and analytics being a differentiation factor.

With technologies being connected, there will be an emergence of usage based models, autonomous cars, wearables, digital health including genomics, drones and use of artificial intelligence.

Despite these facts however, less than 45% of insurance industry players have FinTech strategy and even less than 15% are active participants in incubator programs. There is a predication these numbers will increase in order to stay competitive and up to date with FinTech

There is also a predicted change in the need for employees with training in the psychology and behavioral economics trades.

Cases and Emerging Trends

As an emerging trend the service is still at an infancy stage and not enough statistics exist to give a view on the trend.

Motor insurance telematics is still at an incipient stage—even in Italy where market usage is above 8%. Benefits of motor insurance usage monitoring technology can be categorized a proactive approach, objective information and loss prevention and mitigation.

Snapshot by Progressive is a USA based company that installs a (usage gets monitoring technology) telematics box for a period of 75 days, the client a price adjustment based on his or her own style of driving

Current startups in the space are proving that the use of technology is a positive development for the insurance business itself and for its customers, who are looking for more options, flexibility, and transparency.

Insurtech will not only benefit the business itself but will also benefit it’s customers.

As regulation continues to evolve across the Financial Services industry the time when cash management simply meant ensuring your Bank account had sufficient funds in it has long since passed. An effective manager of cash not only has to have a good understanding of the various aspects influencing a cash position, they are also required to understand a considerably more rigorous reporting regime.

Regulators require firms to be able to manage their cash positions on a real time basis throughout the day. Additionally, when managing Intraday Liquidity institutions must consider items such as the level of intraday credit provided to them, and ensure they have the ability to manage the flows effecting this.

These and other requirements continue to put pressure on the systems used to monitor and report cash and liquidity positions. The importance of accurate and reliable information, available on a timely basis has never been more important.

The workshop planned for the end of February will consider the various aspects of cash management and how changes to regulation have resulted in the requirements of today. We will look at the developments in the payments industry and how IT has responded to the challenges set, and played it’s part in providing solutions.

Through a simulation exercise participants will walk through a day in the life of a cash manager, look at ensuring best practice and how to overcome the challenges that present themselves on an all to regular basis.

Finally, a panel discussion will allow us to hear the view of senior market practitioners and their expectations for the future, this will be followed by a Q&A session.

By Clive Jones