technical description

The application complies with directive 2004/39/CE regarding markets of financial instruments.

Pegasus MIFID allows creation of an highly integrated environment for the fulfillment of regulatory obligations arising from MiFID directive.

In particular, the application pulls data from different IT sub-systems and, through back-ends, can provide real time informations on the adequacy of client's transactions, "best-execution" and, more generally, it can fulfill all the obligations of "transparency" required by MiFID. 

Pegasus MiFID is able to interact with the following sub-systems:

• Systems of access to markets;

• Market Abuse;

• Flows of Market prices and informatiions (news);

• "Adequacy" module if present in securities' sub-system.

• Personal data (clients,securities, issuers, qualified counterparty).

markets' integrated definition 

The procedure allows definition of an integrated Markets' structure:

• Regulated Markets;

• Multilateral Trading Facilities (MTF);  

• Systematic internalisers.

This overview of Markets (Trading venues), ensures efficient transparency pre-trade and post-trade in terms of managed volumes (market liquidity), price levels, applied commissions.  

Parametric definition of transparency obligations:

• Type of financial instruments involved (ex. shares admitted to negotiation on regulated Markets, quoted bonds , etc.);

• Differentiated rules for "blocks" handling (precisely transactions that exceed  certain thresholds);   

•  “Price improvement” management ("best" price terms applied to professional clients).

client information sheet

Pegasus MIFID provides detailed definition of all informations needed to assess adequacy on orders requested by the client (know your customer rule), and particularly:

• Client's classification according to MiFID criteria;

• Investment services rendered (assets management on individual basis, investment advices);

• Adequacy parameters (risk profile, investment objectives, financial experience, perspective financial situation, etc.);

• Financial situation;

• Possible conflicts of interest (ex. links with issuers of quoted financial instruments);

• Detailed client's record;

• Strategy of orders execution (execution only, best execution);

• Operational limits within which "execution only" can be applied (ex. exclusively shares negotiated on regulated Markets and/or UCITS shares).

Best Execution

Since MIFID directive no longer recognizes the obligation  to concentrate negotiation on regulated Markets, the "best execution" rule acquires a growing relevance.

Pegaus MIFID establishes algorithms for "best execution" definition according to: 

• Price;

• Costs;

• Quickness and probability of execution and settlement;

• Parameters diversification depending on type of client, institutional or else.

• Definition of orders execution's strategy (depending on the type of financial instrument, Market of negotiation, etc.).

"Best execution" control is performed taking into account markets' integrated definition performed according to MiFID criteria.

adequacy controls

At the time of order execution, the system performs all adequacy controls taking into account the following parameters:

• Type of client (retail or professional);

• Type of  offered or considered financial instruments (depending on their risks, rating, volatility, duration, issuer risk and trading currency);

• Size and frequency of orders;

• Verification of execution's strategy requested by the client; 

• Verification of adequacy to"Best execution" criteria;

• Notification of possible conflicts of interest.

client's reporting 

Pegasus MIFID provides the client with specific informative reports: 

• Economic conditions applied;

• Detailes on orders' execution strategy ;

• Documentation on "best execution", precisely execution trategy that has been utilized, if requested by the client, on specific orders; 

• Clients  notification regarding major modifications made on orders' execution strategy;

• Publication of irrevocable quotations from systematic internalisers, of shares negotiated on regulated Markets.

Reporting for the market 

Pegasus MIFID provides specific reports available to other market's participants: 

• Post-negotiation informative report for oredres executed outside regulated Markets;

• Pre-negotiation and post-negotiation informative reports for multilateral trading facilities.

control systems

The procedure provides a series of diagnostic reports to monitor the correct application of MiFID regulations:

• List of non-adequate transactions, at various levels of aggregation;

• Monitoring of clients who systematically fail to comply with their risk profile;

• Constant monitoring on correct "best execution" application, in order to ensure "efficiency" on order execution strategy.