Cracked Glacier

Brokers & Dealers

Brokers and dealers play a critical role on the sell-side and are subject to numerous regulatory provisions stemming from onshored EU directives and regulations key amongst which is MiFID/MiFIR. Broadly speaking brokers and dealers can be categorised into introducers, brokers, and dealers. Introducers are typically involved in the reception and transmission of orders whereas brokers and dealers typically get involved in trade execution under best execution obligations to their clients.

‘Brokerage’ in its purest sense involves agency dealing whereas ‘dealing’ involves either matched principal or proprietary dealing. The UK and the city of London in particular has been home to several regulated brokers and dealers and it continues to be a popular destination for new firms to set up to access market liquidity.

Our consultants have immense experience working with all types of brokers and dealers including complex IFPRU730K firms covering all asset classes equity, fixed income, government securities, CFDs, rates products, and commodity derivatives.

Our strong skills around regulatory risk has enabled us to understand business models and their respective risks and create syndicated compliance, risk, and regulatory solutions for brokers and dealers looking to get authorised in the UK or established firms who require continued compliance  support. Whereas in the recent past compliance with MiFIDII and GDPR and several other ESMA interventions posed regulatory challenges to firms, we see adopting the new UK Investment Firm Prudential Regime (IFPR) along with any challenges linked to the end of the UK transition period, particularly around Passporting services into the EU, as likely imminent challenges for most Brokers and Dealers.

We support several Brokers/Dealers in their authorisation and post authorisation compliance needs including Principal Dealers (IFPRU730K active risk-takers) and Prime Brokers. Speak to us to see how we can help you!

Calm Lake

How Pillar 4 Can Help

Authorisation

> Bespoke advice and guidance to navigate the authorisation process

> Guidance on navigating the FCA’s current approach to crypto CFDs  and other crypto derivatives and key concerns

> Support in formulating the right governance structure for your firm, Staff skills and competency assessments

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IFPR implementation

> Pro bono initial assessment of the impact of IFPR on your business

> Financial modelling and full implementation of the IFPR and shift from ICAAP to ICARA

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Risk management

> Developing integrated risk management, capital monitoring, and reporting tools

> Developing suitable pillar 2 approaches

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On-going compliance support

> Providing specialist advise

> Revamping compliance monitoring programmes to something practical and workable in  line with regulations

> Providing risk based on-going compliance monitoring and testing 

> Support in regulatory reporting and capital adequacy reporting