3D enables fund managers and intermediaries to conduct due diligence on the global distributors of their funds (including MiFID II product governance requirements).Given that fund managers often end up having to chase due diligence responses from distributors, 3D focuses particularly on lowering administrative burden and therefore offers concrete commercial benefits as well as ensuring fund managers remain compliant.
Regulatory distributor oversight requirements are constantly increasing, but there is no single standard for such due diligence questionnaires – they are bilateral between each fund manager and distributor. That means distributors receive literally hundreds of slightly different questionnaires in different formats (Word, Excel etc.) each year. To complete these, distributors need input from across their organisations. The risk of a questionnaire getting ‘stuck’ on someone’s desk is high.
Response rates (and times) are inevitably poor, and fund managers spend a disproportionate amount of time chasing responses, meaning responses can be out-of-date. For fund managers, manual responses require time-consuming manual review. A European fund manager calculated that it took them on average two full person-days per distributorto perform a due diligence questionnaire review.
Solution / Technology
3D’ electronic due diligence platform is based around a core question setencompassing all the major industry standard questionnaires which are being constantly updated, whilst allowing ﬁrm-speciﬁc questions as needed. Distributors answer the questionnaire once, eliminating inefficiencies in the current bilateral process.
3D’s coverage is broad: not just ongoing due diligence, but also new distributor and corporate client onboarding. Uniquely, we include new MiFID II oversight of product governance and target market.
We believe 3D is the most flexible distributor oversight solution in the market, and (as far as we know) the only one which facilitates MiFID II product governance requirements, resolving two regulatory challenges in one go.
Our clients are fund managers, therefore our market size comprises all fund managers with more than ~10 distributors. There are no specific geographic restrictions to our coverage.