Top 10 Questions for Mark-Up Disclosure Readiness

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  1. Have you identified a solution that strictly follows the prescribed “PMP Waterfall”?
  2. How are you protecting your valuable principal and retail trade data?
  3. Does your solution permit the setting of parameters and definitions that produce PMP calculations that uniquely fit your firm’s compliance standards?
  4. Does your solution provider account for ‘side of market’ adjustments in Level II, Level III and Level IV situations?
  5. Can your solution provider adjust side of market by Bid/Offer spreads including average Mark-up or Mark-down? Can you adjust PMP calculations for Retail, “Mini-Institutional” and Institutional Trades?
  6. Can your solution provide Real-time and/or End of Day PMP Calculations?
  7. If you have chosen a real-time PMP approach, are you planning to disclose PMP on all retail trades? If not, how will you eliminate PMP calculation values on trades not subject to the disclosure requirements?
  8. What process do you have for identifying and resolving PMP exceptions (i.e., a PMP value that triggers a mark-up that is not within your compliance parameters)?
  9. Does your process support a supervisory review and workflow to support post-trade PMP adjustments with proper documentation?
  10. What type of data infrastructure do you have to support regulatory and Best Execution inquiries?

Correct answers below….

  1. BondWave has developed a PMP process that follows the Waterfall, calculates the PMP value and identifies the Level and Step at which a value can be calculated. To date, we have performed over 150,000 PMP Calculations as proof of concept tests for our clients.
  2. BondWave can implement our PMP Solution on a client-owned server behind their firewall; in a secure Cloud; or in a SaaS solution. All trade data is fully protected, and data is never shared outside of our client-firms.
  3. BondWave’s PMP Solution was architected with customizable parameters and definitions for each Level and Step in the PMP Waterfall so that each client’s solution perfectly fits their unique compliance requirements.
  4. BondWave’s solution contains a proprietary algorithm that enables ‘side of market’ adjustments ensuring extremely precise PMP calculations for Levels II, III and IV.
  5. BondWave’s PMP Solution utilizes proprietary data sets that further enable ‘side of market’ adjustments by average Bid/Offer spreads that can reflect calculations for Retail, “Mini-Institutional” and Institutional Trades for Levels II, III and IV.
  6. BondWave’s PMP Solution can be performed in Real-Time; End of Day; or Real-Time plus “n” minutes.
  7. A real-time PMP process can create any number of end of day headaches, such as a need to back-out a PMP Calculation for a trade that is not subject to the disclosure requirements where a real-time PMP value had been previously calculated. The BondWave Oversight User Interface (UI) eliminates headaches and supports end of day reconciliation with properly documented changes.
  8. The BondWave PMP Oversight UI assists in post-trade PMP and Best Execution Review and Reporting.
  9. BondWave’s PMP Oversight UI enables exception review of PMP calculations and permits client intervention and adjustment with accompanying approval and documentation workflow.
  10. BondWave’s PMP Oversight UI archives all PMP calculations, including PMP values calculated at each Level and Step in the Waterfall. This data is archived and readily retrievable by clients for 7 years. This UI supports regulatory inquires, best execution reviews, PMP data mining, and management reports.

About BondWave LLC

BondWave is a financial technology company specializing in fixed income solutions. We serve a wide range of customers, from small independent RIAs to some of the largest broker-dealers and custody providers in the financial services industry. Traders and advisors use our tools to provide a superior fixed income experience to their clients. By creating sophisticated, yet simple solutions for all stakeholders in the investment process, we help traders and advisors better leverage individual bonds as they work to achieve the investment objectives of their clients. Our tools enable strategy-based investing – including portfolio creation, monitoring and rebalancing – while greatly enhancing the communications between the trading desk, advisors and their clients. BondWave is liquidity and trade agnostic and our sole focus is to provide a simple, sophisticated user experience around individual bond investing.

For more information, please visit www.bondwave.com, email info@bondwave.com or call 630.517.7000

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