Regulatory

Automated tax and distribution reporting

labs.STAR, which was specially developed for asset management companies (AMCs), automates the process for making interim distributions during the year and getting regular end-of-year workflows done. With labs.STAR, you can rely on a flexible reporting solution which has been subject to years of practical testing.

labs.STAR automates and optimises business processes in tax and distribution reporting and displays your individual requirements for the type and scope of the reporting at all times. Furthermore, labs.STAR reduces the amount of manual work which has to be done without restricting the user’s technical authority over the reporting.

The benefits of labs.STAR at a glance:

• Significant reduction in process costs
• Increase in process security
• Speed in time-critical processes
• Standardization of workflows
• Covers all mandatory requirements of the German Investment Tax Reform Act (InvStRefG)
• High level of data security due to the relational database
• Testing security due to authorisation model
• Multilingual and scalable
• Choice between local installation or on a private cloud
• Extensive reporting and analysis functions
• Own or externally referenced rulebook

Due to the implementation of the Financial Markets Amendment Act (Finanzmarktnovellierungsgesetz – FimanoG) in German law, the EU PRIIPs regulation must also be complied with. This presents an enormous challenge for providers of packaged retail and insurance-based investment products, or PRIIPs for short.

labs.PRIIPs is implemented in conjunction with the labs.DWH. It comprises a data model, a workflow manager and a portal with manual maintenance options. The data model is available for data retention, with all processes being managed by a special workflow manager. Additional KID components, such as text boilerplates, may either be entered via the maintenance portal or added via the data import function.

All data is harmonised using labs.DWH, a data warehouse which was developed specifically for finance companies. All processes are managed by the labs.FLOW Workflowmanager. The Workflowmanager includes a data connector which directly accesses the database of the primary accounting system (e.g. SimCorp Dimension ^©, Xentis^© or similar) and extracts all the relevant data. If further data is required for the calculations and this is not in the primary accounting system, it can also be extracted from the relevant data sources.

The benefits of labs.PRIIPs at a glance:

• Easy integration of available source systems
• Significant reduction in process costs
• Increase in process security
• Standardisation of workflows
• Multilingual
• Extensive reporting functions
• Extensive analysis functions

Markets in Financial Instruments Regulation

Being a European regulation, MiFIR has direct effect. It creates the option for national supervisory authorities across Europe to prohibit or restrict the distribution and sale of financial instruments.

The obligation to report transactions under MiFIR requires securities firms which conduct transactions with financial instruments to report “complete and accurate details of such transactions to the competent authority as quickly as possible and no later than the close of the following working day.”

According to MiFIR, trading venue operators (including operators of multilateral and organised trading facilities) must report transactions which are done on their respective platforms if these transactions are executed using their systems and done so by an investment firm which is not subject to the regulation.

The following information must be reported:

• Detailed identification of the buyer and seller for each transaction. In particular, the regulation requires an LEI number (company ID) to be provided.
• Identification of the decision makers at the seller and the buyer if a third party with a discretionary mandate is involved.
• Identification of the person or algorithm who/which is responsible for making the investment decision or executing the transaction at the reporting company.

In view of the complexity of reports, it is recommended to use an ARM (Approved Reporting Mechanism) to report your transactions.

UI labs adheres to the technical specifications set by MarketAxess as ARM. We have the appropriate policies, arrangements and technical capacity to receive notifications of transactions from investment firms and to return information to those firms.

All relevant data is transported from the front office system to the data warehouse, fully processed and transmitted to BaFin via MarketAxess (ARM). The entire process is monitored by UI labs and Customer Service to ensure correct reporting according to ART. 26.

As regards investments between special funds which are managed by different capital management companies, it is necessary to exchange tax data regularly (even daily). This requires stable and deadline-compliant processes, data standards and automated accounting processing for data exchange and processing to be in place.

In cooperation with KPMG, we offer asset management companies a new data exchange solution for special funds. The taXchange solution is a special software solution which has been developed by UI labs and which is independently operated by KPMG. The software solution complies with the most stringent security rules for the standardised transmission of tax-related special funds data between all partners. The integrated authorisation concept guarantees that sensitive information cannot be accessed by unauthorised third parties. Furthermore, deadline congruence is guaranteed when receiving and processing data in a uniform and modern format. With the help of a standard interface, the data may be further processed automatically in your book entry system.