MiFID II

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Is Your Robo Advisor Fit for The Job?

Amidst the strategic decisions and the fears of a mysterious AI stealing the jobs of financial advisors, we believe one important detail remains overlooked. Do we properly understand the machines that are to automate an essential part of our value chain or that may become an alternative to our human operators?

Summary: Swedish FSA Releases Consumer Protection Report

The Swedish Financial Supervisory Authority (FI) releases a yearly consumer protection report featuring customer security highlights in the Swedish financial industry. As in the previous years, the main risks related to customer security relate to mortgages and loans. The interest payments can potentially threaten the economies of the individuals in case of the economic downturn or the increase in interest rates. Another threat that is amplifying in the context of the digitalising society relates to customer data protection. The FI calls for more advanced security systems that would protect the consumer at all stages of a payment transaction. The improvement of these solutions is especially relevant in the context of increased instances of financial fraud. Finally, FI announces that the protection of the wealth management customers and the enforcement of the MiFID II requirements regarding third-party inducements becomes a vital area of the regulators' future work.

Do No Harm: The European Commission Action Plan Urges Financial Advisors to Go Green

Corporate sustainability and responsibility has historically been regarded as a controversial topic both among the academic world and practicing professionals. As early as in 1970, the free market advocate Milton Friedman put forward a view that any sustainability-related actions are likely to destroy shareholder value. Nowadays, the reality of rapid depletion of resources as well as accelerating global warming drives the regulators to promote an opposite view of the sustainability impact on enterprise value.

Mitigating Risk: A Joint Model for High-Yield and Investment-Grade Credit Indices

Today, there are many flawed corporate bond pricing models. However, there is also a novel credit-spread approach that can simulate index prices and accurately capture probability of default, enabling better risk management and regulatory compliance.