Erste Group Selects Alveo for PRIIPs and MiFID II Compliance

Erste Group Bank AG, one of the largest financial services institutions in Central and Eastern Europe, has selected Alveo’s Prime financial data management platform to help fulfil its PRIIPs and MiFID II regulatory requirements.

Erste Group is using Alveo’s Prime to create a central security master for the institution and most of its subsidiaries in seven countries across the region: Austria, the Czech Republic, Slovakia, Romania, Hungary, Croatia, and Serbia.

The central security master will enable the input, aggregation, normalisation and distribution of various central and local data sources to aid the production of Key Information Documents (KIDs), as required under the Packaged Retail Investment and Insurance-based Investment Products (PRIIPs) regulation due to come into force in January 2018.

KIDs will be uniform disclosure documents providing standardised information to give retail investors sufficiently clear and comparable information on the range of products available. In order to promote consistency and clarity of language, the regulation sets out mandatory rules for the form and content of the KID, which must be produced before the PRIIP can be marketed in the local country. Areas of the PRIIPs regulation run adjacent to the distribution of financial instruments requirements within MiFID II, with both impacting how firms market products to customers.

Michael Wilhelm, CIO Group Corporates and Markets at Erste Group, comments:
“PRIIPs compliance requires each subsidiary or savings bank within Erste Group to maintain their own products, and therefore the associated KIDs, which include a combination of both central and local data sources.”

“There are very strict guidelines regarding the ownership and management of such data, which led us to recognise the need for a strong data technology solution,” continues Michael Wilhelm.

“We required a platform that could manage tenant-specific data sets side-by-side with a global master data set. Having worked with Alveo on a previous initiative, we selected Prime for the strength of its core functionality in modelling, normalising, consolidating and distributing reference data.”

The platform will enable Erste Group to implement highly complex cases in both a flexible manner and a short time frame. In addition, the distribution capabilities within Prime will enable the Erste Group to make central security master changes immediately available to the rest of the group through a ‘push’ architecture using Alveo’s Connect data distribution module.

Erste Group is due to go live with Alveo for its PRIIPs initiative in September 2017, ahead of the January 2018 compliance deadline. The Group will apply the same central security master architecture to ensure it has the necessary processes in place to meet the regulatory requirements of MiFID II, including accurate instrument classification, trading venues representation, pre- and post-trade reporting and interfacing with ESMA.

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