January 20, 2021
Plia Utilizes a New U.S. Questionnaire for Best Execution and KYB
Six months after unveiling a new European standard due diligence questionnaire, Urvin.Compliance has released a new questionnaire for U.S. investors. With guidance from the U.S. Advisory Board (USAB), which was formed in mid-2020, this questionnaire will modernize the existing due diligence framework so investment managers can ensure best execution standards are being realized. While the questionnaire is focused on electronic trading protocols and capabilities for equities, the 124 questions cover a lot of ground related to broader issues, such as analytics, team structure, audit, surveillance, reporting, and client confidentiality.
Bill Stephenson, CEO of Urvin.Compliance, said, “After becoming a preferred partner of the Plato Partnership earlier this year and the follow-on success of Plia in Europe, we formed the USAB, which includes ten major buyside (representing over $7 trillion in AUM) and several of the largest global sellside firms. The USAB has been instrumental in creating the latest version of this questionnaire which will become the new standard for U.S. investors.”
Users of the Plia platform in U.S. can now access this questionnaire, including the ability to customize the template by deleting or adding existing questions from an extensive global database. The benefits for the sellside are clear; once a question from the new questionnaire is answered for one client, it will automatically populate for all clients asking the same question. The sellside user would just need to verify the automated response before submitting it to each client.
With higher standards related to best execution by regulators, asset owners, and fund boards, Plia users believe that the responsibility to Know Your Broker (“KYB”) is more important than ever. Part of this education and validation process can be achieved by leveraging Plia’s capabilities whereby the counterparty responses can be centrally managed, audited, compared, and better understood. This industry-led standardization process creates a common framework where best practices can become more obvious and transparent.
Jeff Estella, Principal at Estella LLC, a leading independent consultant and adviser to the financial services industry, said, “Leveraging this new questionnaire in the U.S. will make it much easier for both the buyside and sellside to communicate on important best execution practices. As a member of the Plia US Advisory Board, I think the formation of this questionnaire through a collaborative process ensures that the right kinds of questions are bubbling to the surface, which only makes the industry more transparent and stronger.”
In the future, Plia will be publishing an updated version of the U.S. questionnaire on a yearly basis, in addition to regional versions that align with local regulatory regimes and market structure nuances. Additional multi-asset versions will also be compiled to meet other standards, such as the recent FICC Markets Standards Board draft as it relates to algorithmic trading in the fixed income, currency, and commodity markets.
Access to the new questionnaire can be requested here.
Urvin.Compliance is a financial technology firm that was founded with the explicit goal of transforming the counterparty management process for the institutional trading community. With the ever-expanding information gap between asset managers and their counterparties, Urvin.Compliance has developed solutions that will centrally organize relevant information such that risks can be mitigated and fiduciary responsibilities can be managed. Urvin.Compliance’s flagship product is the Plia platform, which is the largest and most robust KYB platform on the market.