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PREF-X, the digital platform for private debt placement markets

PREF-X, THE DIGITAL PLATFORM FOR PRIVATE DEBT PLACEMENT MARKETS: TECHNICAL SUPPORT FOR THE ISSUANCE OF A 130 MILLION EURO EURO PRIVATE PLACEMENT

After last month’s announcement of a successful capital increase in record time, the fintech PREF-X announced today that they have been the digital support for the implementation of a two-phased Euro PP issuance for a total of 130 million euros in debt instruments on behalf of GL Events.

The French FinTech has secured the sharing of confidential information and its processing as part of standardized debt origination processes, placed with several investors for the management of information flows in the private placement markets.

 

Arranged by two banks, Crédit Agricole CIB and CM-CIC, the private placement linked PREF-X, the borrower and its advisors, the advice of arrangers and dozens of potential investors.

 

Erick ROSTAGNAT, General Finance and Administration Manager for GL Events said: “GL Events is a regular issuer of Euro PP. Thanks to this issuance, we were able to appreciate the efficiency and ergonomics of PREF-X which made it possible to secure and simplify the exchange of information prior to fund raising. This is a highly welcomed innovation.”

 

Vivien LEVY-GARBOUA, Chairman of PREF-X Supervisory Board states that: “The first origination to which PREF-X has lent its technological support is large and has brought together many stakeholders. It demonstrates that we are an effective, accessible, safe, neutral and value-creating solution for all.

 

Marie-Hélène CRETU, PREF-X Executive Chairman, concluded: “For several months, PREF-X has been consistently providing digitalization of information exchanges between issuers of private placements and investors. The use of PREF-X as a support for the origination process of the GL Events private placement confirms the significant added value that the platform offers to market’s participants. PREF-X is clearly positioned as the infrastructure of choice for this market that expects to grow. We will help it, in France and abroad. This is the mission we are assigning ourselves.”

 

About PREF-X:

PREF-X is a French FinTech created in May 2017 by:

 

CoDiese, SAS, a company that assists financial entities in their adaptation to regulatory constraints and advises them in the operational development of innovative solutions.

 

DIIS GROUP, SAS, a company that supports all issuers of obligations, as well as investors, when new issuances of obligations are configured under the EMTN program, Standalones or in Euro Private Placement format. It acts as collateral agent, bondholder and organizer of bondholders’ meetings.

 

Finexpertis Partners, a Spanish corporate investment company that participates in fintech projects linked with its group. The PREF-X platform was developed by MedySIF, one of Finexpertis’ sister companies.

 

Spread Research, SAS, registered as a financial assessment agency within the European Securities and Markets Authority (ESMA) since July 2013, and as ECAI (External Credit Assessment Institution) with the EBA (European Banking Authority) and the European Insurance and Occupational Pensions Authority (EIOPA).

How to increase the profitability of your online broker

The online brokers were the first fintech product – even before the word ‘fintech’ acquired the current sense – to cause a disruptive effect on the brokerage service sector during the beginning of the ‘.com’ boom. Traditional brokers suffered an abrupt acceleration in the reduction of their commissions due to the arrival of these new agents, apart from the fact that traditional banks found in this kind of tool a way to prove they were keeping up with the technological revolution without compromising their main activity.

How to increase the profitability of your online broker

With minimum investments in add-on tools, it is possible to complement an already existing online broker and increase client activity significantly, achieving, in this way, the desired profitability for the online broker.

The rise in competition and the apparently easy access to the online broker technology changed the market conditions for brokerage services completely. This new panorama turned online brokers unprofitable for most financial intermediaries and this tendency has lasted for 20 years. Therefore, stock market transactions have almost become a commodity, but they incur high technological costs, and let us not forget that the platforms are quickly becoming old-fashioned. The outcome has been that many banks have conceived of the online broker as a necessary cost or, in the best-case scenario, as an eye-catching product. What is more, given the high technological and compliance costs, the main costs of an online broker are fixed ones while its variable costs are relatively low. With this situation we find ourselves at a crossroads when it comes to getting more profitability out of the online broker.

How to increase the profitability of your online broker

Fortunately, there is a win-win solution for brokers and their clients. Brokers can offer high quality value-added services that allow clients to have a greater understanding of their market activity and to clearly visualise their actual profitability, automate the protection of their invested capital or calculate, at any given time, the estimated capital gains that their investments should bring. The aim of these services that improve the global service for the client/investment is to ultimately boost transactions. Given the cost structure, the best way to achieve profitability is to help clients to intelligently invest in the stock markets, boosting their activity. What is more, these additional services can attract new clients, since what they offer is a component that will make it stand out from the competition.

The aim of these services that improve the global service for the client/investment is to ultimately boost transactions.

With minimum investments in add-on tools, it is possible to complement an already existing online broker and increase client activity significantly, achieving, in this way, the desired profitability for the online broker.

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What is RegTech?

RegTech

RegTech is a new concept derived from the definition of FinTech primarily signifying the technology applied to resolve issues regarding regulation within the financial industry. It helps companies to better manage and understand their legal risks as well to easily adhere to their regulatory obligations.

This is due to today’s new technologies giving rise to new regulatory necessities and the market’s legal framework often being slow in adapting to and accompanying the speed of these changes within the environment. After a disruption of the market, through new FinTech solutions arising, RegTech helps to adapt the regulatory, financial services and general professional services sectors to these changes.

Adapting to the speed of these changes is key for companies and the governments of any nation, guaranteeing that all those involved will benefit from the arising innovations within the financial industry. In this sense, the technology acts as an important frame of support to expedite, integrate, and automate this process of adaptation to regulations and even to create and audit, therefore offering security and reliability for these governments and companies involved.

The consulting company, Deloitte, announced in a report released in January this year that RegTech could already be considered the new FinTech, referring to companies that offer technology for the financial sector, a concept which is currently trending.

This roots to their belief that that there is a hole that is not being completely considered in the innovations and trends of the financial sector, simply described as the norms and regulations in place.

regtech
Similarly, an article released this March by RegTechFS discusses how regulators were often left out of the conversation of technological advancements, as they were not previously involved in how business is conducted. Filling this hole not only provides regulatory systems an opportunity to progress, but also allows other industries to move further along, not being held back by regulatory challenges.

According to the Deloitte report, “in the short term, RegTech will help companies to automate prevalent tasks of compliance and to reduce the operational risks associated with compliance and reporting obligations”.

Applying technology to issues of regulation is not particularly new, however some of the characteristics that bring and differentiate the concept of RegTech specifically are agility, velocity, integration and the possibility of analysis. According to the Deloitte report, RegTech “provides executives a higher level of opportunity to introduce new capacities that are designed to take advantage of the systems for the obtaining of normative data and the presentation of reports in a profitable, flexible, and timely manner, without running risks of replacing the existing legal systems”.

Examples of companies (according to Deloitte) that already can be considered to be within the RegTech sector include:

  • Fund Recs: Based in Ireland since 2013, Fund Recs focuses on providing a reconciliation platform to progress data management and processes in the Funds Industry. Not only does this allow data leveraging to become more efficient, powerful, and cost effective; but Fund Recs believes that day-to-day business softwares should be well designed and easy to use, making the overall platform applicable to any business. Fund Recs recently took the step forward to also launch their VELOCITY platform for Fund Administrators to develop valuations efficiently.
  • Silverfinch: Part of the MoneyMate Group, establishes connectivity between asset managers and insurers by providing fund data utility through a platform that is safe and controlled. As a self-service tool by design, Silverfinch gives the user increased control whilst still offering training, support, and establishing connectivity within Silverfinch. Through this secure platform, competitors have no access to proprietary information, while insurers can still keep up with their solvency regulation requirements through connectivity with asset managers,
  • Trustev: Based in Ireland, this RegTech company combines machine learning and human intelligence to look holistically at data from online transactions and events. Trustev then scans these transactions, all in real time, to catch potential fraud. Allowing one to reduce fraud allows one to stop fiscal leaks and operative challenges faced by fraud, whilst not affecting the genuine customers that one interacts with.
  • TradeFlow: As a platform operated by Expeditors, TradeFlow provides information on tariff data and regulations, compliance, expected costs of various operations, and much more, to assist both importers and exporters in combating challenges they may face when partaking in international trade. Tradeflow operates as a supply chain tool to make international trade easier, by making international regulations easier to follow, therefore allowing global trade to grow.
  • Vizor: Now operating in 30 countries, Vizor serves both companies and financial regulators. Through Vizor’s software, a company can see and understand all their financial regulatory requirements and have full knowledge of any gaps. Regulators can easily track companies and see which firms are meeting their regulatory obligations. Not only does this create ease in meeting obligations, but it also shows that greater trust within this industry can be built.
  • Corlytics: The Corlytics Financial Fines Database is platform of financial fines providing information on a global scale on financial institutions, regulators, fining authorities, fine parameters, and more. Using analytics technology, the database is further connected to global cases and regulators, allowing further insight. Corlytic´s database allows companies access to trends and analysis, as well as the opportunity to identify potential risks and loss estimations.
  • KYC3: Founded in 2013, KYC3 focuses on three themes: compliance, counterparty risk management, and competitive intelligence. Providing instant reports from compliance, to political risk management, to networks of influence, and much more, KYC3 allows one to complete all due diligence tasks, be efficient, meet compliance regulations, and discover further opportunities and threats. Using big data, KYC3 delivers data mining and analysis solutions to you.
  • TheMarketsTrust: Based in Luxembourg, TheMarketsTrust provides solutions to risk analysis through insights into the financial industry and offering advisory services through financial knowledge and by leveraging their expertise of technology. Through an in-house research team, TheMarketsTrust aims to be both unique and customer-centric, providing solutions to one’s specific needs.
  • AssetLogic: As a fund information network, AssetLogic allows one to aggregate all their data and information into an online location in little time. Through this tool, one can share information and data with whoever they like, allowing more efficient use of this data. Not only will compliance work more effectively, but all sides of an organization will benefit, from investor relationships, to marketing, and more.
  • FundApps: This RegTech platform allows one to automate their compliance monitoring by entering a collaborative community in which industry experts manage the community and help companies be aware of threats and opportunities. Combining high-end technology and experienced industry experts, FundApps aims to deliver quickly, efficiently, and effectively, by harmonizing technology and content.

The advantages of RegTech can be well applied tools of:

  • Analysis of gaps in legislation and regulation
  • Real-time information
  • Compliance and investor relations
  • Information management
  • Reporting of transactions and regulatory reports
  • Storages of risk data
  • Data aggregation, analysis, and sharing
  • Loss, profit, and risk estimations

RegTech represents an opportunity to companies that develop this type of technology, although the challenge currently is to know to apply it well and to do so with an agile manner with regards to technological changes, offering a real competitive edge for companies.

Private Investment Networks similarly shares this vision on RegTech, both fostering and advancing the world of FinTech that we experience today. Through its many roles, RegTech can act as a facilitator of compliance for companies, allowing them to meet regulatory obligations, whilst also fostering the investors’ relations tasks that a company may conduct, as it does in Private Investments Network.

As FinTech advances, the hopes are that we can take a step back and see if there is a missing link or hole in this chain of innovation, as these RegTech firms have done, and consider how compliance and regulatory obligations can be both met with ease, as well as advanced to help our companies innovate further.

Fdo. Helena Lopes and Sara Jokinen.

Private Investments Network is recognized by the French Finance Innovation Cluster

Finance innovation
Private Investments Network is extremely happy and grateful to have received the recognition from the Finance Innovation Cluster, the grouping of private/public competitiveness of the Paris Europlace that promotes technological innovation in the financial sector.

This recognition is given to projects with high potential at the European level and which are:

  • Innovation: Particularly with regard to techniques used, the implemented models, customer segments, the developed technologies and the covered risks;
  • Strategic for the French financial industry: Bringing new products or new customers, facilitating international competitiveness, meeting the needs of the economy and increasing employment support;
  • Credible: Verified partner skills, technical feasibility and financial viability of the project.

The selection of projects that are recognized is made by the members of the Finance Innovation Cluster, which is represented by major financial sector institutions in France.

Here you are able to view the pitch presented by the CEO and co-founder of Private Investments Network, François-Eric Perquel, at the Finance Innovation Cluster.

And here you can watch the video with the presentation (it is in French).

Digitalization: the greatest challenge for banks today

Digitalization is one of the greatest challenges for the banks at the moment. The modern banks need:

  • The ability to adapt to digital technologies and offer more comprehensive services to customers.
  • Have the information for the corporate clients and their various stakeholders well structured, in order to seek for new business opportunities.

“New digital banking technologies and business models continue to emerge, but most banks have yet to realize their promise”

Gartner Report: Predicts 2016 – Digital Banking initiatives will fail without strategic investments in emerging technologies

In this scenario, Private Investments Network provides an optimization solution that enables:

  • A simple and complete platform that automates the processes performed in banks related to companies and investors management, in an agile way and saving time and money.
  • Delivers organized and centralized company information, allowing a comprehensive view of all that is relevant to find opportunities.

Find out more in this video:

Other advantages for banks:

  • Positioning the bank as a true partner of financial companies to provide innovative tools that allow for easy management of their funding sources.
  • Possible positioning for the bank as a value-added partner in the risk analysis for operators of crowdequity and crowdlending. (business opportunity with the Basel III)

If you want to know more, send an us an email to: info@privateinvestmentsnetwork.com and you will be advised how to get the most out of this tool to support the challenges of banks.

Is there a Paradigm change in finance?

The financial sector is changing. Up until now, fast growth in this sector was possible only through external growth. The advance of technology and innovation are changing the scene, enabling the pioneers who easily adapt to change, to quickly acquire relevant positions, as shown by the example of Transferwise in the field of international P2P Transfer.

This underlying trend is reflected in an article by Dave Michaels published in Bloomberg. It refers to the US Securities and Exchange Commission (SEC) revision of the possibility to allow stock exchanges to launch less regulated markets in order to enable small businesses to obtain liquidity. When authorities of this kind start considering such changes, it shows that the trend is coming to the turning point for the whole financial sector.

“The US Securities and Exchange Commission revision of the possibility to allow stock exchanges to launch less regulated markets in order to enable small businesses to obtain liquidity.”

Analyzing this trend in more detail, we come across the first detailed study about the Crowdfunding situation in Europe. The University of Cambridge (Cambridge Judge Business School), has managed to gather the information needed to show, in this report, some extremely revealing (recent) statistical and historic data.

This publication explains that since the global financial crisis (in September, it will have been seven years since it happened), alternative funding has considerably increased in the US and Europe. In particular, it refers to: equity crowd funding platforms, peer-to-peer lending, reward based crowd funding, donation based crowd funding, etc., all of which offer investors several ways to invest, encourage innovation, create jobs and/or finance social causes.

“since the global financial crisis, alternative funding has considerably increased in the US and Europe.”

Some of the data reflected in this study, about Crowdfunding in Europe is:

  • A 144% growth in Europe in 2014 (in comparison to 2013).
  • A total amount of transactions in 2014 of € 2,957M.
  • A specific weight of the United Kingdom with a total of transactions of € 2,337M, and a yearly growth of 159%.
  • The top down ranking of countries with the highest number of online platforms is: the United Kingdom, Spain, France, Germany and the Netherlands.
  • 9,743 SMEs have been financed in continental Europe between 2012 and 2014.

This transaction volume is still to be put into perspective as it only represents 0,4 per 1,000 so of traditional funding according to EBAN figures (European Business Angels Network). That is what traditional banks and supervisory authorities still think. However, given the crowd funding exponential growth, one can hope that SMEs, the greatest engine of our global economy, will get from it the financing needed to keep growing, to innovate and to create jobs.

“given the crowd funding exponential growth, one can hope that SMEs, the greatest engine of our global economy, will get from it the financing needed to keep growing, to innovate and to create jobs.”

This hope is very important for Europe given the drastic reduction in traditional financing for this type of businesses, which is due to the current trend to overregulate banks, in order to try to eliminate the risk from their activity.

For this reason, this way of creating closer and less restrictive collaborations is attracting companies and investors. Will crowd funding consolidate and, in such a case, how will traditional banks adapt to this new emerging paradigm?

Guillem Comi and Carmen Zamudio.