Big Data Technology for Investor Protection

The only measure certified MiFID II

L'AGEFI: Wednesday, October 29th 2014

CFINANCIALS. New directives will impose the TIPER percentage to all financial products traded in Europe.

cfinancials founded and directed by Michael Heijmeijer, based in Rolle, will be in June 2015 at the center of what will probably be an earthquake in the financial world. At this time, the European Union will provide the details of the application of MiFID II Directive, which will force every financial product distributed in 22 European countries to have a risk measurement certified by the European Parliament. This implies that each intermediary - banks, insurance companies, asset managers, asset managers, pension funds, brokers, financial advisors, etc. - must comply with and use this measure. The only one to date that can provide this service is TIPER, developed by cfinancials.

Compared to other risk measures, TIPER offers two distinct advantages clearly in demand by EU authorities. First, it is purely quantitative, resulting in a simple percentage ranging from 0 (minimum security margin) to 100% (maximum security margin). It covers all asset classes, thus paving the way towards comparability of securities belonging to different asset classes. Taking into account a list of factors related to markets, fundamentals, characteristics of a suitable each before aggregating these data to arrive at the percentage product. It's simple: the same environment apply the same factors. The fact that the TIPER allows to express the risk in the same way across all asset classes is a key feature , in addition to its objectivity and its real-time calculation, said Michael Heijmeijer. In addition, it is calculated by a company that has no conflict of interest with respect to all matters relating to the distribution of financial products, which has a history of six years of data on 16 million products 95% of everything that is traded globally on retail markets.

However, these percentages are not a recommendations to buy or sell a security. They simply indicate the margin of safety. This may mean that an action can gain strongly in value while seeing his TIPER deteriorate, for example due to a liquidity issue, increasing the risk of a sharp fall later. We can explain what were the factors responsible for an increase or a decrease in TIPER. These analyzes based on facts are part of our paid services, says Michael Heijmeijer.

When MiFID II Directive comes into force in January 2017, it is almost certain that TIPER will be the only certified measure. For we must not underestimate the barriers to entry for potential competitors. Those who already have the necessary infrastructure and data are often faced with a conflict of interest or have different business models. By using all means to achieve a similar measure, would require an investment of at least 40 million francs. And it will then be required to submit to the entire certification process. Parliament wants to ensure your integrity, you are not just looking to make money quickly. It will take 3-4 years just to get the certificate. It is thus very likely that we will be alone for the first 2-3 years of MiFID II, says Michael Heijmeijer.

His vision goes much further. In a world that is increasingly dominated by online offerings, even financial products will be gradually distributed and purchased directly. TIPER transforms every financial product into a consumer product. The simple scale includes all the underlying structure, the risk of contagion and systemic . As an investor, all you need to do is follow as an investor is the evolution of TIPER and performance of your product. The business model of banks is declining, since the technology can support a very important part of their work. It will remain their role to execute transactions. TIPER will accelerate this process.