Fintech adds OpenKid hub to Kid factory solution

Fairmat, the Italian provider of derivatives pricing and structured product analysis, has unveiled its OpenKid.eu service designed to help packaged retail and insurance-based investment products (Priips) issuers to disseminate their key information documents (Kids) and distributors to retrieve and get access to up-to-date Kid documents and metadata from several issuers from a single access point interactively or programmatically using a Representational state transfer (REST) application programming interface (API).

"Issuers that generate Priips Kids with us are usually also Priips distributors," said Matteo Tesser (pictured), partner at Fairmat. "[These clients] asked us if we could provide an alternative to the commercial document hub model which led us to the development of the OpenKid.eu platform which is free to use for distributors, and it is already online with a working API and with (Italian) issuers committed to contribute their documents."

According to Tesser, this initiative came on the back of the firm's existing Kid manufacturing services being used a number of issuers and manufacturers of structured products. "Some of those clients are also distributors and therefore need to recover Kids from third parties and we saw an opportunity to provide value added and build a critical mass alongside our issuing clients," said Tesser. "We have assumed the cost of hosting the platform and provide the service so that issuers and distributors can now communicate and deploy Kids in one place. The platform is open to any issuer and distributor that wants to upload their documents."

This development also responds to a request from the Italian Certificates and Investment Products Italian Association (Acepi) which was "seeking a service in Italy that would be available for free to distributors so that the majority of small distributors in the market could access this kind of functionality without having to incur on any cost", according to Tesser.

Acepi has assessed a number of solutions including WallStreetDocs, Six and ICE which provide this service for a fee "but this model does not meet the needs of smaller distributors" so Fairmat stepped in to develop a platform and make available the Kids it has archived to any third party, according to Tesser.

"[However], this is not our business and we are not committing for a given quality of service at this stage but on facilitating access to Kids," said Tesser. "The amount of Kids available in the new hub will depend on issuers making them available as opposed to Fairmat. Currently, issuers making their Kids available on our hub include Unicredit, and the issuers which decided to use our Kid factory solution."

The Italian firm has made an impact in the Italian market this year following its partnership with Unicredit to launch RoboCertificate, a new automated platform aimed at enabling investors the creation of personalized asset allocations using the bank's structured certificates.

"We are almost static in regards of our performance this year," said Tesser, adding that Fairmat has become the market leader among providers of Priips regulatory solutions in Italy. "We now cover more than 50% of the banking market and 70% of the life insurance market in Italy."

The firm has embarked on more than 25 Priips projects across the Italian market with players such as Banco BPM, Mediobanca, Banca Sella, the ICCREA network Generali, Aviva Italia, Zurich Italy and other smaller players in the structured products markets.

"Our ambition is to become a significant player at European level," said Tesser. "There are a number of European players that have not committed themselves to any Software as a service (SaaS) for this kind of service so there are still opportunities to tap into. Our target is to grow our market share in other countries."

Fairmat has ambitious plans as it continues building its offering and is working on a Mifid 2 project "so that we can have a comprehensive product compliance offering for market players in the structured products market", according to Tesser.

"We built a very strong infrastructure and we want to leverage our technology to react to client demand and also be able to capitalise on new opportunities and initiatives," he said. "What we have achieved this year is testimony to our capacity and expertise. This year's success has provided us with the foundations to grow our business and continue serving the structured products market at a critical time."

Earlier this year the Italian fintech partnered with Luxembourg-based specialist valuation, risk and performance solutions and regulatory compliance consultancy, Finalyse, to provide a Kids Priips implementation solution to the structured products market in Europe.

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