Several large banks and brokers are now using the investment recommendations solution introduced by Singletrack to help sell-side firms ensure they comply with the obligations of the 2016 Market Abuse Regulation (MAR).

MAR, which replaces the EU market abuse regime MAD (implemented in 2003), defines market abuse as ‘a concept that encompasses unlawful behaviour’ i.e. insider dealing, unlawful disclosure of inside information and market manipulation.

MAR requires that persons who produce or disseminate investment recommendations have arrangements in place to ensure that information is objectively presented and interests or conflicts of interest are effectively disclosed. Obligations include:

  • All projections, forecasts and price targets need to be clearly labelled and material assumptions made in producing or using them are indicated
     
  • Indication of the place where detailed information about the valuation or methodology and the underlying assumptions is directly and easily accessible
     
  • Meaning of any recommendation (i.e. Buy, Sell or Hold) and the length of time of the investment to which the recommendation related are adequately explained and any appropriate risk
     
  • Planned frequency of updates, an indication of the relevant date and time for any prices of financial instruments related and where the recommendation differs from previous recommendation during the 12 month period
     

The Singletrack MAR module is a seamless, fully integrated option for the Singletrack Edge platform.

According to Stuart Berwick, Singletrack CEO, sell-side firms must be able to demonstrate to the regulator that they are meeting the core requirements of the regulation, having taken several key steps towards compliance, with a commitment to adopting a wider ranging solution as the detail of the new obligations evolve over time.

“Singletrack has addressed the investment recommendations requirements of MAR with a new module to our established Singletrack Edge CRM platform. It records all recommendations with completion date, allows clients to see a list of all recommendations by user / ticker, distributes a report on all recommendations to all clients,  and provides an extract of this information for firms to publish on their own portals” explained Stuart Berwick. “This solution captures client interactions across emails, IB, meetings and voice calls.”

Singletrack investment recommendation solution

A recommendations database has been incorporated into the Singletrack Edge system to record new recommendations. These can be added at the start of each day or while logging a client activity. The information captured includes:

User
Date (Completion Date)
Recommendation/Stance
Ticker
Company
Sector
Target Price
Market Price
Time Horizon
Conflicts of Interest & Reason
Recommendation Comments

When Recommendations are made over the phone or in a meeting, the content of the client activity can be captured through Singletrack Call Manager or in an activity logging sidebar. When logging an activity, additional key data needs to be captured at dissemination in accordance with MAR guidelines:

Investment Recommendation
Analyst Recommendation
Set Recommendation
Market Price (at the time of Dissemination)

MAR mandates that clients have a view of all recommendations made. Singletrack can provide a branded investor-facing web page displaying recommendation history and the link to this page can be embedded in any client communication. Alternatively, an extract of all recommendations made during the day can be provided at close of business for firms that wish to include required fields set by their compliance onto their portal.

About Singletrack Edge

Singletrack Edge is a dedicated sell-side CRM, client engagement and research monetisation platform incorporating that provide the intelligence to monitor, manage and plan revenue generating activities on a fully coordinated, cross-departmental basis. Designed for an increasingly competitive and regulated environment, Singletrack Edge delivers maximum visibility and control with the flexibility to meet individual user firm’s requirements.

About Singletrack

Singletrack was founded in London’s financial centre in 2009 by a former JP Morgan CTO who saw the potential in applying on-demand technology and advanced analytics to sell-side customer engagement and research distribution.

Today the company supplies a range of capital markets CRM, client engagement and research monetisation solutions backed by a proven best practice methodology. The company’s products are used by investment banks, institutional brokers and independent research providers on four continents.