LPA

Author: Theres Jung

  • FINMA ergänzt Transparenzpflichten zu Klimarisiken in 2023

    FINMA ergänzt Transparenzpflichten zu Klimarisiken in 2023

    Im Jahr 2021 hat die FINMA das Offenlegungsrundschreiben um klimabezogene Finanzrisiken erweitert, woraufhin die Finanzinstitute der Kategorien 1 und 2 entsprechende Offenlegungen nach zahlreichen Kriterien aufgebaut haben. Mittelfristig werden auch zahlreiche andere Finanzinstitute eine Klimaberichterstattung veröffentlichen müssen (z.B. auf der Grundlage der TCFD).

    Diese Offenlegungen wurden Ende November 2022 seitens FINMA beurteilt und in einem Bericht zusammenfasst. Finanzinstitute sind verpflichtet, der Öffentlichkeit eine Vielzahl von Aspekten im Zusammenhang mit Klimarisiken zu erläutern und offenzulegen.

    Diese Aspekte sind folgende:

    • Klimabezogene Finanzrisiken und deren Einfluss auf die Geschäfts- und Risikostrategie
    • Auswirkungen auf die bestehenden Risikokategorien wie Markt-/ Kredit-/ oder operationelle Risiken
    • Risikomanagementstrukturen und -prozesse für die Identifizierung, Bewertung und Behandlung
    • Quantitative Informationen einschliesslich des Beschriebs der verwendeten Methodologien
    • Spezifische neue Governance Strukturen

    Dennoch ist die FINMA mit den bisherigen Bemühungen unzufrieden, da die Berichte zu wenig transparent und schwer zu interpretieren sind. Teilweise sind die gewünschten Informationen nur bedingt auffindbar und eine Vergleichbarkeit untereinander ist kaum gegeben.

    Nachfolgende Probleme wurden im Bericht aufgegriffen:

    • Sofern Verweise möglich sind, müssen diese eindeutig sein und einen klaren Bezug zu klimabedingten finanziellen Risiken aufweisen.
    • Die Governance muss gezielt um einen klimabezogenen Risikorahmen ergänzt werden. In dieser Hinsicht sind Angaben, die allgemeine Governance-Strukturen und -Prozesse beschreiben, nicht ausreichend.
    • Die bloße Identifizierung von Risiken ist nicht ausreichend. Vielmehr müssen die spezifischen Auswirkungen auf die Geschäftsstrategie und das Risikoprofil analysiert und offengelegt werden.
    • Die Risikomanagementstrukturen und -prozesse müssen spezifisch nach Klimakriterien erfolgen und sich von generischen Beschreibungen lösen.
    • Aufgrund der großen Methodenvielfalt können unterschiedliche quantitative Methoden verwendet werden. Es muss jedoch zwingend ein Bezug zu den Exposures hergestellt werden und eindeutig sein, welche Portfolios abgedeckt werden.
    • Kriterien und Bewertungsmethoden für die Quantifizierung von Klimarisiken müssen offengelegt werden.

    Die FINMA wird die Angaben zum Klimarisiko im Jahr 2023 erneut überprüfen und bei Bedarf entsprechende Maßnahmen einleiten.

  • Lucht Probst Associates (LPA) migriert, um die Vorteile der Azure-Innovation und -Sicherheit zu nutzen

    Lucht Probst Associates (LPA) migriert, um die Vorteile der Azure-Innovation und -Sicherheit zu nutzen

    Banken und Finanzinstitute auf der ganzen Welt sind mit sehr detaillierten Compliance- und Regulierungsanforderungen konfrontiert. Diese dienen dem Schutz des Endkunden, doch die Einhaltung der Vorschriften ist für die Bank mit einem enormen Kosten- und Verwaltungsaufwand verbunden. Eine weitere Belastung für unsere Kunden sind die vielen manuellen Prozesse in Verbindung mit maßgeschneiderten Silo-Technologien innerhalb ihrer Architektur. Dies macht es ihnen unmöglich, saubere Daten für ihre regulatorischen Anforderungen zu erhalten.

    Daher müssen sie sich von ihrer heutigen Situation zu einer optimierten Technologielandschaft wandeln, die vollständig darauf ausgelegt ist, ihre neuen automatisierten und digitalisierten Prozesse in der Cloud auszuführen.

    Um diesen Transformationsbedarf und die sehr hohen Erwartungen an die Servicequalität zu erfüllen, war das Cloud-Hosting mit Microsoft Azure die klare Wahl. Dies bietet unseren Kunden eine sichere globale 24/7-Cloud-Lösung, die skalierbar ist und auf die man sich in hohem Maße verlassen kann.

    Mit dem globalen und skalierbaren Angebot von Azure können wir sicher sein, dass sowohl unsere Kunden als auch unsere Softwareentwicklungsteams qualitativ hochwertige automatisierte Prozesse erzielen können, die „immer einsatzbereit“ sind. Darüber hinaus bringt die Migration zu Azure sowohl uns als auch unseren Kunden mehr Flexibilität, ein Angebot, das wir sehr zu schätzen wissen. Uns gefällt auch die Tatsache, dass die Azure-Lösung zukunftssicher ist und wir von den kontinuierlichen Azure-Innovationen profitieren können. Da Azure der bekannteste globale Cloud-Anbieter ist, können wir außerdem neue Mitarbeiter und neue Kunden leicht schulen und einbinden.

    Der Schlüssel zu unserer globalen Expansion sind voll integrierte Allianzpartner. Indem wir es ihnen ermöglichen, unsere Technologie zu nutzen und sie auf Azure verfügbar zu machen, können wir unsere Reichweite sowohl auf bestehende Kunden als auch auf neue Regionen und neue Sektoren ausdehnen. Wir sind fest davon überzeugt, dass LPA durch unsere Partnerschaft mit Azure dazu beitragen kann, die Kosten für unsere Kunden zu senken, sie in die Lage zu versetzen, sofort einsetzbare Azure-Dienste zu nutzen, die Leistung und Skalierbarkeit zu erhöhen und globale Best Practices und Standardisierungen zu übernehmen. Es ist eine positive Geschichte für das gesamte Ökosystem.

    Zusammenfassend lässt sich sagen, dass Azure uns hilft,
    ein hocheffizientes SaaS-Angebot zu entwickeln.

    Die Umstellung von einer Infrastruktur auf eine andere ist komplex und risikobehaftet, so dass ein solches Projekt nicht unterschätzt werden sollte. Die kleinen Details, die man oft nicht sofort auf dem Radar hat, können schnell kritisch werden, z. B. unterschiedliche Standardwerte für Timeouts usw. Die frühzeitige Einbeziehung unserer Kunden in Projekte ist ebenso notwendig wie eine frühe gemeinsame Testphase.

    Wir haben uns bei der Migration für Microsoft entschieden, da wir bereits Microsoft-Nutzer sind. Wir haben vor 20 Jahren begonnen, .Net Beta zu verwenden, so dass der Wechsel zu Azure eine natürliche Entwicklung war. Unsere Erfahrung hat gezeigt, dass wir, da wir unser Geschäft mit Microsoft-Technologie betreiben, eine bewährte Lösung und verlässliche Unterstützung für jede Migration haben, die wir durchführen möchten. Wir betreiben unsere Software seit vielen Jahren in unserem eigenen Rechenzentrum auf der Basis der Hyper-V-Infrastruktur. Mit dem Lift-and-Shift-Ansatz und den Best Practices des Azure-Migrationsprogramms war es möglich, die gesamte Infrastruktur auf Azure als Basis zu verlagern. Von dort aus können wir beginnen, virtuelle Maschinen durch native Azure-Dienste zu ersetzen, um alle Vorteile einer echten Cloud-basierten Lösung zu nutzen. Außerdem können wir dies Schritt für Schritt mit einem Prozess und einer Geschwindigkeit tun, die zu uns passen.

    Sehen Sie sich die Fallstudie hier an:

  • PRIIPs RTS v2: Concerns About Misleading Performance Scenarios

    PRIIPs RTS v2: Concerns About Misleading Performance Scenarios

    PRIIPs suffers lots of criticism around its methodology for Performance Scenarios. Both manufacturers and consumers claim the results are often too optimistic, since they are based on the last 5-year performances and these were positive. In an effort to solve these issues, the ESAs introduce in PRIIPs RTS v2 a new methodology for the calculation of the Favourable, Moderate and Unfavourable scenarios for most funds. Or more precisely, it applies to linear products, called Category 2 in PRIIPs terminology. The new methodology follows a back-testing approach over at least 10 years and the unfavourable scenario is based on the worst scenario found.

    Why should the new methodology lead to more balanced results?

    The longer period (10 years vs. RTS v1’s 5 years) is expected to “catch” additional samples, with a higher probability of some negative scenarios. In addition, while the unfavourable scenario in RTS v1 is based on the 10th percentile, in RTS v2 it is based on the worst scenario. Again, a higher probability for a negative result. Moreover, the methodology for the unfavourable scenario embeds a mechanism to catch further negative performances: the back-testing should take into consideration not only full holding periods, but also shorter periods during recent years (and extend them using “linear transformation” to the required holding period, that’s another topic for a different article). This technique further increases the chances to find negative unfavourable scenarios.

    Does the new methodology help?

    In many cases, it does. Unfavourable scenario will show negative results, illustrating the possibility of loss to the investors. However, still, under current market development over the last 10 years, there are many cases the new methodology will not help. And now, there is another concern: in many cases the new technique for the unfavourable scenario shows unrealistically over-pessimistic results. Let’s see some examples.

    Misleading positive unfavourable scenario for “mainstream” equity funds

    For a recommended holding period of 5 years (market practice for equities), many equity funds will show a positive return in the unfavourable scenario. Why? Since those funds (1) did not experience a loss in case of 5-year holding over the past 10 years, and (2) they did have negative returns for a minimum holding period of one year over the past 5 years to date. Note that one year is the minimum period in the technique of applying “linear transformation” on shorter periods, again, due to reading constraints that’s a topic for another article. For example, we calculated the unfavourable scenario for Invesco S&P 500 UCITS ETF (calculation date: 27.01.2022). For an investment of USD 10,000 it shows a value of USD 13,343 after 5 years. This translates to a positive annualized return of 5.94% in the unfavourable scenario (!), and we are talking of a fund tracking a popular, mainstream equity index. By the way, you might say no worries, RTS v2 allows us to choose lower percentiles from the calculated scenarios, if we believe the results are too optimistic. Well, you are wrong. This possibility exists only for the non-linear products (Category 1 & 3 in PRIIPs terminology) with the unfavourable scenario based on the 10th percentile. In the case of the back-testing methodology, the unfavourable scenario is based on the worst outcome. Sorry, there is no lower scenario.

    Misleading too negative unfavourable scenarios

    On the other hand, for funds that experienced a negative performance over the last year, the methodology assumes this negative performance will repeat, again and again. This is not happening in equity markets. Usually, after a period of one to two years, there is a recovery (and in many cases even before). As an example, we chose fund Xtrackers MSCI China UCITS ETF (calculation date: 27.01.2022) and calculated its unfavourable scenario. Since this fund experienced a loss of -33% over the last year, this translates into a compounding loss of -86.42% over 5 years. This never happened! Actually, the results lead to a lower return than the stress scenario that still follows the Cornish Fisher expansion-based methodology. In this case, according to RTS v2, the stress scenario needs to be adjusted: it should be capped at the unfavourable scenario level. This phenomenon happens with any fund experiencing a significant loss over the last year.

    Conclusion

    We know, finding a methodology that always works is difficult if not impossible. The new methodology for performance scenarios of funds has higher chances to eliminate overly optimistic results. However, as illustrated above, too-good results will still occur, while exaggerated pessimism in the unfavourable scenarios will become a common phenomenon.

  • Comparison between UCITS SRRI and PRIIPs SRI

    Comparison between UCITS SRRI and PRIIPs SRI

    Executive summary

    Towards the expiry of the UCITS exemption from PRIIPs, we decided to write an article pointing out practical changes and differences between the UCITS SRRI (the Synthetic Risk and Reward Indicator used in the directive on undertakings for collective investment in transferable securities) and the PRIIPs SRI (the Summary Risk Indicator as part of the packaged retail investment and insurance-based products regulation).

    Both operate on a 1-7 scale but have a completely different methodology. This has been a source of confusion amongst investors. As UCITS funds will be required to reclassify risk using the PRIIPs methodology, it is likely that the risk classification number of existing funds will become lower than previous.

    For example, as will be elaborated in this article:        

    • Many equity UCITS funds that are classified as SRRI 6 or 7 will be classified as SRI 5.
    • Many high yield fixed income UCITS funds that are classified as SRRI 4 or 5 will be classified as SRI 3.
    • Some investment grade fixed income UCITS funds that are classified as SRRI 3 will be classified as SRI 2.

    Good industry practice is that the fund managers should make clear to investors and sales distribution channels that the lower risk number does not represent a real reduction in risk but is merely the effect of a different risk calculation method. This lower risk level may also impact the product governance and target market decisions. The PRIIPs RTS does allow manufacturers to voluntarily increase risk classifications, but it is felt that this should only be done under an industry level alignment in order to maintain comparability between similar funds.   

    UCITS SRRI Calculation

    The synthetic risk and reward indicator is a requisite part of the Key Investor Information Document (KIID) for UCITS funds. The SRRI is used to indicate the level of risk of a UCITS fund by providing a number from 1 to 7, with 1 representing the lowest risk and 7 representing the highest.

    The SRRI is based on historical data of the fund prices. By calculating a standard deviation of the historical returns of the fund (i.e. realised/historical volatility) and then mapping it into seven buckets. This calculation is seen as very simplistic.  

    PRIIPs SRI Calculation

    The Summary Risk Indicator is composed of two measures; Market Risk Measure (MRM) and Credit Risk Measure (CRM). Most UCITS funds have the lowest CRM due to two reasons: (1) The fund assets are held in segregated accounts and in the case of the fund manager becoming insolvent, the fund assets are still held within those accounts on behalf of the investors. (2) The PRIIPs RTS requires to consider credit risk on a look-through basis only in case of an exposure of 10% of more of the fund’s value to a certain entity.

    When the CRM is the lowest (i.e. CRM 1), the SRI is affected only by the MRM, as illustrated in the following table (taken from the RTS, ANNEX II, PART 3, point 52):

    As shown in the table above, when the CRM is 1 (i.e. CR1, first row), the SRI (indicated in the table cells) equals the MRM. Therefore, for the sake of this article referring the most UCITs, we will focus on the MRM, assuming the CRM is 1.

    For most UCITS funds (linear exposure, i.e. PRIIPs Category 2), the formula used for calculating the PRIIPs MRM is the Cornish Fisher expansion formula. This statistical technique was first described in 1937 and helps to approximate the value at risk of an investment. The formula considers the historical returns of a fund and approximates the loss (or profit) in a certain probability (percentile). According to the PRIIPs RTS, the percentile for the MRM calculation is 2.5%, i.e. the probability for this loss is 2.5%, a rather low figure representing a worst case scenario.

    Based on the result of this calculation, a volatility that can lead to this loss (or profit) at a probability of 2.5% is calculated. This is called VEV, which stands for VaR Equivalent Volatility. The VEV is then mapped to a 1 to 7 scale MRM based on the buckets shown in the PRIIPs RTS, ANNEX II, PART 1, point 2:

    Regulatory Change

    Upon the expiry of the UCITS exemption from PRIIPs, UCITS funds will stop producing UCITS KIIDs and will begin generating PRIIPs KIDs. The timeline for the expiry should be published soon by the European Commission and is expected to be during 2022.  

    Our Evaluation

    To get ready for the upcoming change, we decided to perform a set of SRRI and SRI calculations. We started with equity funds. We took two large cap funds and two small cap funds and calculated their risk classifications. In all cases the PRIIPs SRI was lower than the UCITS SRRI:

    We also repeated the test for fixed income funds of two types: high yield funds and sovereign debt. The table below shows that the high yield fixed income funds also have a lower risk classification under PRIIPs. The sovereign debt moved in one case (which can be a function of long or short term). 

    Conclusions

    Fund managers should be prepared to lower risk classes for their funds. It is not advisable to voluntarily increase the SRI without a proper industry alignment. Instead, fund managers should communicate to distributors and investors that the reason for the lower risk is the change in methodology and not a real decline in their funds’ risk.

    Fund distributors should receive the new risk classes from fund managers in advance of the go live date. The Product Governance committees of the fund distributors should rethink the mapping of MiFID Target Market to their clients, assuming the new risk classes.

  • EffCom AG merges with LPA

    EffCom AG merges with LPA

    About one year after the acquisition, the specialist for process automation, document management and securities solutions EffCom AG is being completely transferred as brand and legal entity to Lucht Probst Associates GmbH. Since November 2019, the long-established Baden-Württemberg company has already been operating under the umbrella of the LPA Group, but still under its own name EffCom AG. With the planned merger, both companies take into account the close cooperation of the last year and open up the possibility to intensify this even more in the future by simplifying and synchronizing bureaucratic processes. With this step, the LPA Group would also like to expressly reaffirm its commitment to the EffCom management, employees and customers.   

    Together with EffCom board member Peter Zugmantel, who will remain on board after the merger as head of the Ludwigshafen site, the LPA Group is pursuing with great intensity the goal of becoming the world’s leading developer and provider of technology-based capital market solutions and playing a decisive role in shaping the transformation of the capital markets.    

    The purely formal legal act of the merger has no impact on customers and employees. All current EffCom employees will in future be employees of Lucht Probst Associates GmbH, which will then also be the contractual partner for all EffCom AG customers. The product portfolio around innovative software solutions will also remain unchanged and will in future only trade under the name of Lucht Probst Associates GmbH.  

  • LPA adds RegTech market leader Acarda to group

    LPA adds RegTech market leader Acarda to group

    +++ Acarda, the specialist for integrated, regulatory and automated data management and reporting solutions will in future be operating under the umbrella of the LPA Group   

    +++ This acquisition takes LPA into the growth segment of asset management and marks another milestone on its journey of international expansion

    +++ The acquisition broadens the LPA proposition combining innovative CapTech and RegTech automation solutions for financial sector organizations worldwide


    Frankfurt/Main, (08.09.2020)     – The LPA Group (https://www.l-p-a.com), the European market leader in capital market technology (CapTech) and technology-centric transformation services for the financial world, today announces the acquisition of the Acarda Group. As one of the leading international solution providers for asset managers, fund administrators, insurance companies and banks, RegTech specialist, Acarda focuses primarily in the automation of regulatory reporting and in automated data management. One of the company’s USPs is the proprietary cloud-based SaaS (Software-as-a-Service) platform, arep. This automates the entire reporting process irrespective of the IT systems on which asset managers, service providers or insurance companies operate their business. In addition to European reports and data templates such as AIFMD, Solvency II, PRIIPS/MiFID II and CRR, arep covers country-specific reports, for example for BaFin, CSSF, FCA and BVI.  

    The addition of Acarda will enable the LPA Group to enter the attractive digitalization and transformation business in asset management and increase its expertise and technical know-how in the field of automation. Founded in 2006, Acarda solutions are actively used by over 40 leading international organizations and employs around 50 people at locations in Frankfurt/Main and Luxembourg. As a result of the extensive expertise gained in asset management, the LPA Group can partner with more asset managers, insurers and fund administrators in addition to banks and financial services companies. In adding leading asset management companies in Germany, Luxembourg, France, Austria, UK and Ireland among others to its list of customers, LPA is once again underlining its ambitious international growth objectives. For the company, which also includes the CapTech Modelity, startup AAAccell, which has received many awards for its innovations, and EffCom. The acquisition of Acarda represents a further step toward becoming the global CapTech market leader.    

    The accretive, add-on acquisition has already been preceded by a successful collaboration and test phase lasting several months. Since April 2020, the two companies have been working closely together, successfully exploiting sales synergies and setting up initial technology and interface projects. With a view to the future, LPA and Acarda plan to work closely on joint products and to develop further ancillary segments. The two managing directors of Acarda, Gerhard Jovy and Ali Karaca, will remain on board after the takeover by the LPA Group.         

    Peter Schurau, CEO of the LPA Group:     “Our aim is not only to help shape the global market for CapTech and technology-centric transformation services, but to lead it. Innovative IT transformation that can be implemented immediately is in high demand in the financial industry. That is why we want to grow not only organically, but also through acquisitions. I am therefore delighted about the transaction with Acarda because the company perfectly complements the LPA Group. From our very fruitful cooperation with Gerhard Jovy, Ali Karaca and their team in the past, we can expect further product innovations for the global financial world.” 

    Stefan Lucht, co-founder and managing partner at LPA:     “There is enormous potential for process automation not only in the capital market sector but also in the entire financial industry, both for users and for providers. With the acquisition of Acarda, we are proud to now be a highly competent solution provider for asset managers and insurers. Acarda’s automated reporting solutions provide real value for our customers worldwide and increase our footprint in the digitalization of time-consuming processes.”  

    Gerhard Jovy, Managing Director Acarda:     “In asset management in particular, there is increasing demand for a central software platform that covers regulatory requirements. And a succession of new requirements promises further growth potential. Combined with the technology and consulting expertise of the LPA Group, we will be able to serve customer needs in this segment even better in the future. We look forward to a successful collaboration and to developing new products and solutions together.   

    About the LPA Group:     The LPA Group is one of the world’s leading developers and consultants for technology-based capital market solutions (CapTech) for banks, insurance companies and fund providers. The core business of the multi-award-winning group is the CapTech suite, a portfolio of leading technology solutions for automated consultancy, sales and documentation for financial instruments, structured products and OTC derivatives. The products and services of the LPA Group help financial services companies in their capital market activities to automate their necessary advisory and regulatory documentation processes, thereby increasing their efficiency and achieving full compliance. One of the main LPA solutions, Capmatix, speeds up digital transformation within leading organisations by providing powerful and highly configurable modules that are used as building blocks that fit seamlessly into an existing digital infrastructure. The LPA Group also advises its customers on the strategic planning and implementation of CapTech solutions. At its headquarters in Frankfurt and at ten other international locations including Tel Aviv, London, Zürich, New York, Paris, Barcelona and Singapore, almost 400 technology and capital market experts are now working for a portfolio of international clients.   

    https://tier3-bnz3dha.jg.elsterkind-dev.de/software/capmatix-regulations
  • LPA acquires Tel Aviv based Modelity Technologies in a strategic move to become the leading CapTech player

    LPA acquires Tel Aviv based Modelity Technologies in a strategic move to become the leading CapTech player

    Lucht Probst Associates (LPA) acquires 100% of the shares in Modelity, a leading Israeli tech company for the financial and capital market industry

    Combining the product and customer portfolios of Modelity and LPA makes the combined company the CapTech market leader in Europe

    International expansion continues with a location in the Israeli technology metropolis of Tel Aviv, one of the most important tech hotspots worldwide


    Frankfurt am Main, Tel Aviv 13.08.2019:     The contracts have been signed: LPA, a leading provider of technology innovations for capital markets and financial institutions (CapTech) has acquired 100% of the shares of Modelity Technologies Ltd. The company, which has had a new majority shareholder in Motive Partners since the fall of 2018, is thus making further progress in its internationalization and on its way to becoming the global market leader for CapTech.

    CapTech companies develop technology solutions and products that help financial services companies to increase their ability to innovate in their capital market activities. Specifically, they use their offerings and services to support their customers in scaling their business activities (through automation for example) and improving their business processes through sustainable optimisation and digitalisation – always in compliance with existing and future regulatory standards.

    By acquiring Modelity Technologies, an experienced CapTech provider that was established in 2000 and employs 80 highly skilled technology capital markets and regulatory professionals, LPA has significantly expanded its customer base outside the DACH region, making it the largest and leading CapTech provider in Europe. By integrating Modelity, LPA has added state-of-the-art products and solutions to its own extensive CapTech suite. Whereas LPA has focused its technological activities on the digitalisation and automation of documents and processes, for example, Modelity now adds a multi-award-winning technology for financial and regulatory analytics to complete LPA’s future offerings. Based on this technology, Modelity recently developed Unicost, a system for monitoring regulatory reporting (e.g. costs & charges, product governance) between MiFID manufacturers and distributors and marketplace, a fully automated multi-dealer platform for the issuance and processing of personal investment products.

    With the company’s location in Tel Aviv, LPA is gaining access to an extensive pool of top talents and to the great innovative strength of the Israeli technology scene and can continue to expand its own CapTech expertise. This opens up new ways for the company to generate further renowned national and international customers and recruit highly talented professionals.
    The management team of Modelity will continue to serve the company. The old and new CEO of Modelity is Ayal Leibowitz, one of the founders of the company, who has more than 20 years of experience in management and software development and capital markets. Asaf Seri will continue as President and Chief Operating Officer (COO). Like Leibowitz, he has many years of experience and extensive expertise in software development and project management.

    Peter Schurau, CEO of LPA: “Modelity and Tel Aviv fit perfectly with LPA. Experts in the Israeli technology metropolis have long been setting new trends in the digitalisation of the financial market industry. Making use of this know-how, combining it with LPA’s own expertise and working with our new colleagues in Tel Aviv on developing innovative products and solutions – that’s a really exciting prospect. I am very much looking forward to working with Ayal Leibowitz, Asaf Seri and the entire Modelity team.”

    Stefan Lucht and Roland Probst, founders and directors of LPA: “The integration of Modelity Technologies is a strategic and significant milestone in the history of our company and adds the latest piece to our internationalisation strategy jigsaw. Above all, it strengthens our positioning as the market leader in the CapTech segment. Together we will be able to gain major new customers in highly attractive regional markets.”

    Ayal Leibowitz, CEO of Modelity and new member of the Global Executive Committee of LPA: “The fact that we now belong to the LPA group is a wonderful opportunity for Modelity to add our in-depth expertise acquired over many years in developing technology solutions for the capital markets and to apply our know-how in a powerful group of companies. We will work together to achieve our common goal to become the leading global provider of capital market technologies”

    About Lucht Probst Associates (LPA):Lucht Probst Associates is a technology company specialising in the demands and characteristics of the capital market sector. The core business of LPA is the continual development and expansion of its portfolio of technology solutions for automated consultancy (LPA Digital Client Interaction), sales (LPA Captano) and documentation (LPADoc) for financial instruments, structured products and OTC derivatives. LPA offers market-leading solutions that support banks in efficient compliance with the requirements of MiFID II, PRIIPs and FIDLEG in conjunction with the Key Investor Information Document (KIID). This document contains the essential information about a financial product, including financial terms, risks and historical performance data for private investors. In addition to the development of technology solutions for the capital market, LPA offers strategic consultation, management and implementation services. Following the integration of Modelity, almost 300 technology and capital market experts are working on the international client portfolio at nine international locations.