RegTech IntelligenceMultiple risk management failings, resulting in high profile fines and exposing the ineptitude of boards in understanding the complex risks, coupled with poor internal controls and assessment findings, have painted a grim picture of risk management in 2013. The Financial Stability Board’s (FSB) recent Thematic Review of Risk Governance further corroborates this picture. The report
A tense week of stand-offs between ECON and the European Parliament over sending parts of EMIR back to the drawing board has ended. The big news? EMIR timelines look to be back on track. The potential delays looked to be a blessing for the industry, granting a second chance to gain clarity over non-financial counterparties. Now
It’s 2013 and we’re still talking about regulating HFT in the absence of data quality and standards conversations. That needs to change. 2012 seemed like the year of regulators taking a prolonged look at computer trading – defining what it might be, its potential effects, why it may be problematic. It is still far from clear that
Will the FSB succeed in attempting to bring non-bank credit intermediaries out of the shadows? Now that regulators have this mass of data, what is the next step in linking it and putting it to use? In 2013, global regulators are finally taking a good look at connecting the data dots. The FSB has especially
In November 2012, the FSB published its proposals for regulating the shadow banking sector – and in particular the repos/securities lending market – in two consultation papers, collectively titled: ‘Policy Framework for Strengthening Oversight and Regulation of Shadow Banking Entities’. These papers are fundamental in setting the tone for the global shadow banking regime, including
After months of being in the works, the Regulatory Oversight Committee (ROC) for the global FSB has come into being. The ROC is responsible for “upholding the governance principles of and to oversee the global LEI system … in accordance with the High Level Principles and recommendations set out in June 2012” by the FSB. In
In May, the CFTC’s Bart Chilton characterised regulatory cost benefit analyses a “sword of Damocles” calling out for more qualitative data. Since then, multiple no-action letters and a court case against the SEC have shown that there are deep-seated issues with CBAs that regulators are having trouble keeping below the surface. For the SEC and
Shadow banking could soon force infrastructure upgrades and additional business costs– will the industry find ways to ease the pain? As repos, securities and, potentially, CCPs become part of the transparency agenda via new shadow banking regulation, this could result in infrastructure upgrades and increased business costs looking set to be on their way in
New, prescriptive EU clearing obligation rules will require new counterparty classification and monitoring systems. Is this a standard data hub opportunity? With EMIR having entered into force on 16 August 2012, and the release of final draft technical standards by ESMA in September, firms will soon be facing rules on clearing obligations and eligible counterparty
Five years after the crisis started, real change is finally in store. Who is on the naughty and nice lists? In 2012, the industry saw a flurry of financial sector reforms. With over 140,000 pages of regulation produced over the past twenty four months, an ambitious but often discordant global regulatory framework has developed, leaving
Can a controversial tax reporting initiative actually be good for your bottom line? We explore how. The US Foreign Account Tax Compliance Act (FATCA) has been heavily criticised, and accused of being a “kind of US backward imperialism” with “an atomic bomb used to kill a fly”. At its heart, FATCA exists to track down
With the world’s most systemic banks having made it through the first round of invasive living wills in 2012, regulators now have their sights on the Financial Market Infrastructure (FMI). Central Counterparties (CCPs), payments systems and exchanges will have a lot to do in 2013 and could do well to heed some lessons from their
The UK’s Foresight Commission report on HFT has finally heard the industry’s call for clear, shared data standards across the financial system. However, it remains to be seen whether Europe – or the world – has the stomach to realise this vision. After a series of dramatic computer trading glitches across the globe, most recently
2012 could well go down as a turning point for the industry. Billions in fines have raised consciousness of the need for better financial crime processes, systems and controls. Regulators have found sanctions breaches, anti-money laundering deficiencies and bribery failures – and will likely to continue to do so as they examine historical compliance. We
Managing, aggregating and maintaining risk data used to be a box-ticking exercise with easily achievable targets. In 2013, landmark new global requirements mean firms will face a big step up. Over the past few years, regulation in the area of risk management information (MI) was fairly basic. In 2011, the FSA, like their US cousins,
Finally, after months of anticipation, European Commission President José-Manuel Barroso outlined his “decisive deal”: a big picture vision of an ideal, sound roadmap for Europe’s financial future. The EC proposes to create a single supervisory mechanism for banks in the euro area – starting on 1 January 2013. Under the proposals the European Central Bank
Europe’s first Capital Requirements Regulation report is imminent – even through the European Parliament has yet to pass the act. Now regulators need policy alignment to save the industry €24.2 billion. In July, JWG’s new research highlighted that regulatory standards were critical to saving €24.2 billion. After conducting an extensive survey of 80+ people in
The G20 says OTC regulation was to be finalised by end 2012. But, with at least 34,000 more pages of regulation expected by 2016 from the US alone, firms need to upgrade their BAU. Following the G20’s meeting in April 2009, the pathforward for regulation on OTC derivatives seemed clear. In the shadow of the
The industry has been waiting for the “high-level” opinions of the Liikanen Report, and its prescriptions for reform of the turbulent European banking sector. The reforms, while suggestions rather than binding Policy (as Barnier continues to remind everyone) call for huge changes to how European banks operate. The biggest development of these is a Volcker-style
The Office of Compliance Inspections and Examinations (SEC, FINRA, NYSE) has released an assessment of 19 firms regarding their controls to prevent misuse of material, non-public information. While not legally binding, this development is important because this is the first comprehensive statement in years regarding a regulatory view of a firms systems and controls for
When the G20 first revealed its plans in April 2009, the scale and scope of new reforms was all encompassing. Now, we are seeing how serious the regulatory community is about them. The battle to know your customer provides a first glimpse of just how seriously the industry will take the new reforms. At the
In their latest landscape assessment of Basel III, the EBA came to a conclusion regarding a problem the industry has been grappling with for a long time: rules that aren’t detailed enough lead to uneven outcomes in data reporting, aggregation and assessment. The report finds that, while data quality from national regulators has improved and
Thanks to technological hiccup after technological hiccup, High Frequency Trading (HFT) remains a permanent fixture in the financial press. With each blip, regulators and politicians promise to regulate HFT, but how they are going to put effective controls in place is still an open question. Despite the noise, the issues with HFT remain the same.
SIFI assessment criteria are becoming increasingly stratified and are coming to financial institutions near you. Higher capital surcharges, ring fencing, ‘unplugging’ and new living will reports are all parts of a solution to combat ‘too big to fail.’ Some economists contend that the banks that are too-big-to-fail enjoy a lower cost of capital because they
Most of what the MEPs voted into law in July required ESMA to define exactly what they meant in their record keeping demands legislated through EMIR. Unfortunately, a few clauses slipped through the net in the drafting process… One of these was regarding record keeping which, according to experts, means that, as of 16 August,