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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).

The 5 main reasons why you should introduce a Market Data Management

The 5 main reasons why you should introduce a market data management

  • Cost savings
  • Market Data cost transparency: who uses what and how.
  • Being compliant in market and vendor audits
  • Updated information on costs by: person, department, area, entity, vendor, product, location, etc.
  • Increased bargaining power with vendors and markets

Market Data Management

In the past, the stock markets did not have competitors – if a financial entity wanted to offer the possibility to buy instruments from Euronext, the only available option was to buy them from Euronext’s traditional market, thanks to their local market membership or through other global brokers that were members of said market.

Back then, the biggest source of income of traditional markets was generated by the transaction costs.

However, this panorama has changed. A few years ago, the MTF (Multilateral Trading Facilities) showed up as a consequence of an initiative launched by the EU that regulated operations outside financial markets. The MTF offers investors and investment companies an alternative to traditional financial markets. They allow to operate in a wider variety of markets than most financial markets, even with assets that do not have an official market.

This has caused a decrease in the transaction income of stock markets. In order to compensate for this, stock markets have been making the most out of the data they have. They are creating new segments and new information packages in order to optimize these data.

Market data comes third when analyzing costs in financial entities, the first and second cost centers being staff and infrastructure.

Therefore, it can be assumed that an improvement in cost management, usually called market data management, can have a positive effect on the entity’s annual cost savings.

So far, in most entities there hasn’t been a proactive market data management. Bills are paid when they coincide more or less with the bill from the previous period, since there is no way to verify whether they are correct or not.

In the rest of Europe and the USA, the position of the Market Data Manager and the Market Data Department are a reality and they are of utmost importance within the entity.

In many countries there are Market Data management professionals that meet periodically to discuss techniques, different ways to optimize market data management, and the trends in this field. They also request vendors that, whenever they want to introduce a new service, they do it to all entities at the same time. All of this helps create market transparency and give prominence and power to entity versus vendors.

In Spain, until recently, this was unimaginable since market data management was limited to what was done when a user wanted a new terminal or wanted to add a new market to the terminal they already had.

An improvement in cost management, usually called market data management, can have a positive effect on the entity’s annual cost savings.

The financial risk of not implementing a market data management

However, this tendency is starting to shift directions, not only because of the increasing interest shown by financial entities in controlling and optimizing costs but also because of the audits that stock markets and data vendors are carrying out in entities.  This tendency of carrying out audits has the aim of studying where and how the data is being used and introducing new user licenses from stock markets and vendors, which increase their revenue.

The objective of all markets is to thoroughly control who is receiving their data and how they are using it.

Up until very recently. The lack of total transparency due to the absence of a real market data management didn’t bring about any consequences since once being audited, agreements were reached. Now it seems that different stock markets are increasingly requiring a more clear vision of their data use – posture backed up by the transparency required by European regulations like MiFID.

The consequences of the lack of transparency brings about million-dollar fines, as entities must prove “their innocence” and if they cannot do so, different markets impose backdated fines that can reach up to 5 years back in time.

The best defense against these audits is having a market data management that could show:

  • The contracted data
  • Who can access the data
  • The profiles of data users
  • What they use the data for

In order to perform a market data management, market data inventory control systems are needed, which allow to organize this information and they give the entity the kind of essential transparency required during audits.

What is more, once these systems are implemented, the entity can reduce the time invested in administrative management and focus instead on value added services, such as: analysis of alternative products for users, better attention to demand, etc.

SMEs can benefit from having what is called a “managed service” or outsourced service.

SMEs can benefit from having what is called a “managed service” or outsourced service.

How to achieve real cost savings thanks to market data management

The most important entities, which are following the procedures of North American and European banks, are opting to create or boost their market data management department.

SMEs can benefit from having what is called a “managed service” or outsourced service, which allows them to have the necessary transparency without the need to invest on additional resources for this management.

Some of the services offered by these managed services are:

  • Contracts management
  • Cost allocation
  • Invoice conciliation
  • Permissioning
  • Reporting
  • Quote planning assistance

The entity can access the information at any given moment and be sure that it is up-to-date and corresponds to what was hired and what is being used.

This situation can be seen as a lifeguard when being audited, and these processes turn out to be much smoother whenever information from 5 years back has to be retrieved.

What is more, once they see there is a control system, such as a cost inventory system, auditors can tell that there is better control in that entity than in others that do now own that kind of service, with the positive consequences this entails.

 

Also, this type of transparency and control allows the entity to have information and not just data. Information they have:

  • Total cost per vendor.
  • Market data cost per user, department, division, office, etc.
  • If there are users that have similar or duplicate services by two different vendors.
  • If there are users that have a much more elevated cost that the average cost of their department.

 

Besides, the entity has information to carry out a proactive market data management:

  • Set notifications to alert contracts cancellation or renewal dates
  • See the reasons why there may be differences between the incoming invoices and what was stipulated in the contract

 

Thanks to all of this, the financial entity gains control over their data management, it can negotiate contracts with better conditions and have control and profitability out of their assets (the market data generated within the entity).

 

Once the entity gets this recurrent control, it will be able to make other types of analysis such as:

  • Demand analysis
  • Alternative product analysis
  • Etc.