RegTech Intelligence
It has now officially been announced that the European Commission will reject ESMA's application for a delay of Exchange Traded Derivatives (ETD) for the scope of EMIR. Consensus among trade associations, conference attendees speeches from regulators all indicate that this is case. This means that we won't have the luxury of a longer MiFID II…
Our regulators who art in Brussels, Furloughed be thy friends, Thy directives come, Thy reports be done, For Dodd-Frank as they are for EMIR. Give us this day our draft technical standards, And allow us our indices, As we forgive those that sell market data to us. And lead us not into non-compliance, But deliver…
Institutions are closely following the MiFID II negotiations, and for obvious reasons: the sequel to 2007’s headline regulation threatens to have a similarly large impact on the shape of European – and even global – markets. But, for such a high priority issue, up-to-date information has been relatively hard to come by. At an October…
With no fewer than 70,000 pages of regulation, and some record fines, 2013 will be a year to remember (or possibly to forget) for many financial services professional. And with only four weeks to go until December, and some well-earned rest, we thought it was time for a little retrospection. With that in mind, here,…
European banks are currently living in a grey area when it comes to EMIR enforcement. By ESMA’s account, all institutions should by now have classified their counterparties to derivatives trades. However, the first tentative steps towards new utilities have yet to take root – so what kind of solutions will the industry opt for? All…
With trade repositories expected to be registered by ESMA soon, the date at which trade reporting becomes mandatory is not far off. However, many parties to derivatives trades are still unsure about the finer details of how they will meet this mandate. 7 November is the date by which ESMA expects to have a trade…
Earlier this week, ESMA published an update of its Questions and Answers (Q&A) clarifying the use of Legal Entity Identifiers (LEI) for the purpose of OTC trade reporting to trade repositories. The Q&A finally provides for cross-border mutual acceptance by stating that only pre-LEIs endorsed by the ROC are eligible to be used for EMIR…
Though it seemed for a while that the US/EU’s ‘path forward’ agreement on substituted compliance might have simplified OTC compliance for the markets, when it came to writing the rules the SEC and CFTC have somehow managed to make the definition murkier than ever. This is fuelling concern on an international level, and bringing…
By Sam Tyfield, Vedder Price The EU and the US have a long-standing safe harbour agreement in relation to the protection of personal data transferred from the EU to the US (to which organisations may either (a) sign-up and appear on the US Dept of Commerce website as ‘compliant’ or (b) agree to abide by…
By Bird & Bird LLP This is an update from Bird & Bird on the progress of the EU Data Protection Regulation. The original document can be found here: EU Data Protection Regulation: one step forward After months of discussion, the LIBE Committee of the European Parliament voted on compromise amendments to the draft, General Data…
It will come as no surprise that Twitter has shunned the NASDAQ and chosen NYSE to host its IPO. Last year’s troubled Facebook IPO and a glitchy summer for the NASDAQ make the reasoning clear. But the NASDAQ is not the sole source of these technology problems, and Twitter is still far from guaranteed a…
A variety of technology providers, consultancies and data providers (more than 10 of them at the last count) have announced (or have been rumoured to have formed) partnerships of some form in order to create new utilities that can share data between banks. With the huge and increasing number of regulatory requirements for customer data,…
This week the FCA published a policy statement on how it plans to use new powers to publicise proposed investigations into bank misconduct. These powers were given to the FCA in 2012; previously, it could only publish information on cases once it had decided to take action. It now intends to publish details of planned…
MiFID II is almost upon us. Expect it to be the regulatory topic of conversation very soon. So what do you need to know about it? The legislative package that we call MiFID II is actually made up of a Directive and a Regulation, which cover a broad range to trading activities, instruments and market…
Article 12 of EMIR gives Member States the power to set their own penalties for breach of the Regulation. This has led to deferred publication of the fines and left firms in many countries with a lack of clarity over what they are putting at stake (and a consequent inability to react proportionately). So what…
On Thursday, 10 October, the City of London Law Society (a trade body for City solicitors) published a letter dated 23 September accusing the FCA of gold-plating (or at least misinterpreting) the AIFMD (Alternative Investment Fund Managers Directive). The dispute surrounds the date by which firms must be AIFMD-compliant. In its interpretation of the Directive,…
On 10 October, the ESMA released its 2014 work programme and budget for the next fiscal year. Emphasising six key areas of focus for the regulator over the next year, priorities on the whole have not diverged much from the 2013 plan, but a larger budget projection and more personnel have expanded their capacity to…
2013 has been a busy year for KYC professionals as they respond to a number of different regulatory requirements. Regulatory demands have raised the bar on not only existing data requirements but also have introduced a number of new ones. In response to this, there are now many different conversations going on in parallel about…
Conduct risk is becoming something of a buzz word for regulators this year. In the UK, the FCA took over supervision of consumer protection from the FSA and published its Risk Outlook 2013 back in March, which outlined the new conduct risk regime. Since then, and coming on the back of the FSA’s MMR and…
On 2 September 2013, the Financial Stability Board (FSB) published the sixth of its semi-annual comprehensive progress reports on over-the-counter (OTC) derivatives reform, as per the agenda of the 2009 G20 summit in Pittsburgh. Although some of the reform proposals have stalled, particularly in light of the compromised agreement between the US and the EU…
The Regulatory Oversight Committee (ROC) for the Legal Entity Identifier (LEI) system has endorsed 3 Local Operating Units as being compliant with the ROC’s criteria for mutual acceptance. The 3 pre-LOUs endorsed are Germany’s WM Datenservice, France’s INSEE, and the CFTC’s CICI utility. With 13 pre-LOUs in existence, it’s likely we’ll be seeing this list…
On 1 October, the US government failed to reach an agreement on appropriate budget levels and a nationwide shutdown of federally funded entities ensued. Clearly enforcement actions are going to take a hit. But what effect will this have on the rulemaking process, especially given that we are in the middle of a delicate balancing…
Last week, HMT published a consultation paper on secondary legislation to extend the 2009 UK Special Resolution Regime - which currently only covers banks - to investment firms, CCPs and group undertakings. While the legislation mostly concerns the rights of resolution authorities to enforce special insolvency processes on these firms if they fail, with power…
Ever since the swaps market became widely aware of ‘Footnote 88’ late last week, the regulatory spotlight has focused on whether the CFTC would stand firm on the swap execution facility (SEF) rules deadline of 2 October. In preparation, some of the less prepared market participants have been scrambling towards compliance for a far wider…
It’s common knowledge that KYC requirements are becoming a major problem for banks, many of whom have thousands of employees conducting due diligence, document collection or data entry. Unfortunately, the regulatory trend towards more and enhanced customer data has not abated. JWG research has shown that 20+ regulations to be implemented over the next 3…
If you thought the debate on swaps reform in the United States was settled, you were wrong. A new row has emerged between the Commodities and Futures Trading Commission (CFTC), international regulators, and firms as the definition of who is a Swap Execution Facility (SEF) has been greatly expanded under a controversial footnote in the…
Despite ESMA quietly delaying the timeline for Trade Reporting under EMIR to February 2014 (90 days + 5 after the predicted approval of the first Trade Repository in November), firms are now being faced with important decisions in how to implement the LEI. Discussion are required to address what regulations are there that require an…
On 24 September, TD Bank was fined nearly $90 million from US federal authorities for failing to accurately detect and report suspicious banking activity arising from one of its clients, Scott Rothstein, who was charged with racketeering and having operated a large Ponzi scheme to the tune of $900 million. Suspicious activity was detected by…
At a recent conference in Switzerland, Scott O’Malia of the CFTC spoke out against his organisation’s approach to cross-border regulation thus far. The speech, entitled ‘Regulatory Harmonisation, Not Imperialism: A Workable Cross-Border Framework’, criticises US regulators’ protectionist stance when it comes to areas such as OTC regulation, putting national interests before international: ‘What the Commission…
What lessons have been learned from the NASDAQ outage and will the SEC’s latest response stop it from happening again? Following the NASDAQ outage in August, the SEC announced that Chair White had “stressed the need for all market participants to work collaboratively – together and with the Commission – to strengthen critical market infrastructure and improve its…
The Securities and Exchange Commission (SEC) recently proposed to change both the reporting structure for money market funds (MMFs) and the transparency behind the net asset value (NAV) calculation, to make it easier for MMF investors to understand the risk involved in their investments. In particular, this involves new reporting requirements and changes to the…
With criminal penalties for bank mismanagement, the absence of clear standards for banks’ recovery plans leaves outliers feeling exposed, so what should you do? The EBA recently received industry responses to two consultation papers it issued in May. They concern technical standards on scenarios banks should use to test their recovery plans, and how RRPs…
By: Conor Foley & Anna Sedzik. This memo summarises key provisions of the draft proposal for a Regulation of the European Parliament and of the Council on indices used as benchmarks (IBR) and next steps in the legislative review process.1 1. Key point summary (1) If adopted, the proposed legislation would apply to all benchmarks that are…
With 15 September this Sunday, the date is imminent by which banks must have portfolio reconciliation and dispute resolution agreements in place with their non-financial counterparties. However, a recent Thomson Reuters article accurately sums up the situation: ‘Most sell-side firms are not even close to getting all their NFC clients on board with EMIR. With…
As of the beginning of September, ESMA has now issued its recommendations on the equivalence of six countries’ OTC rules: the US, Australia, Hong Kong, Japan, Singapore and Switzerland. However, only Australia and Switzerland were found to be equivalent, whereas firms and FMIs from the other four countries will have to be jump through certain…
On 1 September, ESMA issued its advice to the Commission on declaring countries outside the EU to be equivalent under EMIR. The good news is that at long last we should have some certainty on what approach to expect. The bad news: we are in for years of frustration as practitioners attempt to nit-pick their…
By: Conor Foley & Umar Ahmed. New EC proposals raise risks for fund managers and investors relying on EU Money Markets. Overview This memo summarises key provisions of the Commission proposal for a Regulation of the European Parliament and of the Council on money market funds (MMFR) and next steps in the legislative review process.1 1. Key…
As part of its on-going drafting of the Banking Reform Bill (BRB) which will implement the Vickers plans for ring-fencing retail banking in the UK, the Treasury recently released an impact assessment of the draft secondary legislation. It makes for interesting reading as it gives an initial indication of the costs the government thinks will…
So, now the dust is beginning to settle in regards to the NASDAQ outage of 22 August, what do we know about the cause? It’s now clear that it was a ‘bad handshake’ between two rival exchanges that caused the failure, in that the NYSE was not able to connect and pass data to the…
In its Macroeconomic impact assessment of OTC derivatives regulatory reforms, published on 26 August, the BIS have estimated the additional annual global cost of reforms as between €15 billion and €32 billion. This huge cost, and the difference between the lower and upper brackets, makes clear the case for getting OTC reform implementation ‘right’ (see…
Today, 28 August, Mark Carney, Governor of the Bank of England, announced that UK banks compliant with Basel III capital buffers would receive marginal relief from liquidity requirements under CRD IV (read Carney’s announcement). However, the PRA have made clear this relief will only be temporary, since EU rules require full compliance by 2018 (read…
The majority of regulations require firms to classify their clients into a discrete set of categories; JWG research has identified at least twelve, including FATCA, AMLD IV, EMIR, CRD IV and MiFID II. When implementing them, firms are faced with two clear options: An easy option, twelve separate programmes, each costing ten pounds to implement;…
If the G20 had given birth to a child at the Pittsburgh Summit, that child would now be off to school. In other words, we’ve come a long way since the early policy-making stages of the post-crisis political landscape. As such, EU regulators are eager to get this round of rulemaking over and move onto…
Back in May 2013, the EBA outlined a list of liquidity data in addition to that required under the Liquidity Coverage Ratio (LCR) and the Net Stable Funding Ratio (NSFR) that it wanted to collect for monitoring purposes (here). The list included information related to the entity’s reliance on maturity transformation, concentration of funding by…
By Dr David Murphy No financial institution likes to remind its clients that it might fail, so it is no surprise that OTC derivatives clearing houses don’t heavily advertise their risks. But they are risky. A clearing house could fail in at least three different ways: 1) One or more clearing members could default, and…
The implementation of the UK’s Banking Reform Bill (BRB), covering the ring-fencing of retail banks, is taking shape, and it looks like we are headed to the family courts, dear. We see three main kinds of requirements: 1) KYC and due diligence requirements, linked to identification and transfer of core and non-core deposits; 2) restructuring…
Millions of hours have already been spent aligning Dodd-Frank and EMIR implementation in the OTC space. However, in July, regulators changed the game. By declaring certain sections of Dodd-Frank and EMIR to be equivalent, they broke a worrying stalemate between the EU and US which threatened to leave US entities unable to clear through European…
On Tuesday, 13 August, the CFTC made a U-turn on a controversial issue: dual disclosure, reporting and record-keeping requirements for funds. Having beaten legal challenges brought against plans to impose two sets of rules on funds, one set by the CFTC and one set by the SEC, the CFTC in the end backed down, saying…
As more EMIR deadlines approach, some regulatory positions are being reinforced, giving firms more reason to fear penalties and the growing legal stakes. However, a delay to a reporting deadline because ‘ESMA realised that more guidance was needed given the complexity of the issue’ begs the question: Can regulators say for certain that more unknown…
The Government has finally published the International Tax Compliance (United States of America) Regulations 2013 (as FATCA is named in the UK) to formalise the agreement reached between the UK and US Governments last year. We saw the draft regulations in February this year, but there has been a great deal of uncertainty on just…
by Dr David Murphy. The key protection which CCPs have against counterparty credit risk is their default waterfall. They take margin from clearing members and their clients, and default fund contributions from clearing members, and use these amounts as a bulwark against losses should a clearing member default. The different levels in the default waterfall…
We are close to shutting down EU OTC trading. A mere five work weeks from the EMIR deadline, by which banks must have classified their counterparties in order to reconcile portfolios with them, we have almost reached an impasse. Will the industry mobilise and help your local pig farmer to stay in business by enabling…
On 6 August, ESMA updated its Q&A guidance on the implementation of EMIR (read here). Firms should pay particular attention to these Q&As as they have been known to overturn some common assumptions in the past, and this edition is no exception. In particular, the new answers spell bad news for the future cost of…
How will the PRA, FCA, and CMA manage conflicting competition mandates? On 24 July, during the second reading of the UK’s Banking Reform Bill, it was stated that a new competition objective will be given to the PRA. UK banks now find themselves with three national competition regulators jostling for position, not to mention those…
Counterparty classification regimes, such as CRD IV and EMIR, give banks a good reason to centralise their reference data, and the BCBS' Risk Data Aggregation Principles provide a clear framework for doing so. From 1 January 2014, under CRD IV, firms will need to calculate CVA and hold additional capital on all derivatives contracts. However,…
It is common knowledge that the central clearing and risk mitigation requirements apply to any third country firm trading with an EU entity. However, it may come as a surprise that these requirements can also apply to trades purely between two third country entities where such trades have a ‘direct, substantial and foreseeable effect with…
Why EMIR has some banks threatening to stop trading derivatives by 15 September. Under EMIR there are three kinds of counterparties: financial (FC), non-financial (NFC), and non-financial over the clearing threshold (NFC+). By 15 September, FCs and NFCs trading derivatives with one another must agree in writing the joint steps to be taken to mitigate…
The European Banking Authority (EBA) has finally published its final draft Implementing Technical Standards (ITS) (here) on supervisory reporting for CRD IV. Long awaited, the technical standards set out the near-final reporting requirements, as part of COREP, for own funds, financial information, losses stemming from lending collateralised by immovable property, large exposures, leverage ratio and…
Before ESMA left for their summer holidays, they made it abundantly clear that EMIR will apply in one form or another outside of the EU. This threatens to disrupt trading flows globally as early as 15 September. By this date, parties trading derivatives must agree in writing the arrangements under which OTC derivative portfolios will…
The FSB has produced a revised set of guidance on the implementation of recovery and resolution planning, based on a consultation issued last November. This may have an impact on how national authorities draft and interpret their RRP regimes, with consequences for legal, treasury and back office functions. The direction taken gives welcome breathing room…
Today, 22 July, marks the day that the Alternative Investment Fund Managers Directive (AIFMD), must be transposed into national law. With the rules now technically in force, UK-based firms have a year to become compliant and apply for authorisation with the FCA. However, this apparently generous deadline disguises the fact that many managers may need…
On Thursday, consultation opened on secondary legislation from the Banking Reform Bill, which centres on implementing the Vickers recommendations to ring-fence retail banking activities. The legislation will have potentially large consequences for KYC on-boarding, risk and corporate governance. Banks are required to identify and report their ‘core’ and ‘non-core’ deposits. Core deposits must be held…
The Internal Revenue Service (IRS) and the US Department of the Treasury has revised the timelines for implementing reporting and withholding requirements under the Foreign Account Tax Compliance Act (FATCA). These delays are very welcome to firms, particularly FFIs, still facing uncertain requirements and a short implementation timeframe. Withholding on U.S. source income, such as…
The IMF has released a working paper on Systemic Risk Monitoring detailing the policy options and methodologies available to regulators to accurately measure systemic risk. The problem is that, although touted as being a practical guide, none of the options given are a solution to the problem of “how can we measure systemic risk?” "The…
Given the exponential growth of reporting requirements since the crisis, firms often ask: ‘Where does all this data go and who has the time to look through it all?’ In fact, recent statements by regulators have made this question all the more valid given that regulators’ data systems, it is increasingly apparent, often suffer from…
The Australia has produced final implementing regulation that will implement their derivatives trade reporting regime. ASIC consulted on rules for trade repositories and trade reporting in March and April 2013, and expects these rules to be finalised and enter into force in July. These draft regulations include restrictions on ASIC’s rule making power in relation…
The proposal for Cross-Border Guidance and accompanying exemptive phase-in order has been approved by the CFTC in a 3-1 vote. Regulators have broken a worrying stalemate between the CFTC and the European authorities; worrying because it threatened to split derivatives trading along jurisdictional lines, with US entities unable to clear through European infrastructure and vice…
US and EU regulators have announced a 'path forward' on approaching cross-border derivatives regulation that will allow firms operating internationally to comply with only one set of OTC trading requirements, rather than implementing both Dodd-Frank and EMIR. For a long time it seemed that there would be no agreement on the 'equivalency' between Dodd-Frank and…
The scope of the Alternative Investment Fund Managers Directive has been a big grey area since the first draft. This carries with it primary problems for funds, who may not be certain whether they are AIFs or not, but also secondary problems for those selling derivatives to the buy-side. Firms that are uncertain of their…
INSEE has now gone live as the first French pre-LOU able to issue pre-LEIs. Details can be found on their website here (in French) . Translation below: The G20 has approved the unique device for intentifying market participants (global LEI system, GLEIS) agreed at the June 2012 Los Cabos Summit, which will facilitate the management…
Recent developments give firms some reasons to celebrate but be prepared for a long engagement With lots of different regulatory benchmark efforts now underway, the industry could be forgiven for not taking a common stance. With IOSCO set to issue final principles in July, ESMA and the EBA are simultaneously consulting on a European set…
The new legislative package contains some surprises for those engaged in ‘risky’ trading MiFID II is almost upon us. This month, the Council of the EU agreed their general approach, meaning that the draft of MiFID II/MiFIR is free to advance to the European Parliament. If all goes according to the current plan, the new…
Is data protection soon to become the biggest compliance hurdle facing the back office? In an effort to improve the protection offered to consumers, and to harmonise data practices, the EU is currently in the process of passing two pieces of legislation: the Cybercrime Directive and the General Data Protection Regulation (GDPR). Few people have…
Risk regulation is a cluster bomb – multiple devices with multiple impacts – but applying uniform risk data principles can save costs in 2013-16 With six months before the 4th Capital Requirements Directive comes into force, many will be asking what technological improvements will be necessary to efficiently manage risk going forward. Before they embark…
The sheer scale of the EU regulatory reform agenda means that it is easy to miss key details in new requirements which, viewed in isolation, are not major implementation issues, but viewed in context of the wider reform package can cause significant headaches. The counterparty classification cross-over between EMIR and CRD IV is one of…
As JWG noted back in April, during the G-20’s April meeting in Washington tax evasion featured surprisingly prominently amongst the expected items on Basel III implementation. G8 Leaders, as a result of the summit held in Northern Ireland in June, have now committed to publishing ‘action plans’ setting out the concrete steps they will take…
The Financial Action Task Force (FATF) has been very busy. The outcomes of their recent plenary meeting have been released alongside a small library of guidance documents. The FATF have released guidance on how countries and the private sector should handle the money-laundering risks associated with prepaid cards, mobile payments and digital currencies. After extensive…
London Stock Exchange Group has announced the release of the Interim Entity Identifier (IEI). On June 6th, the FCA confirmed its sponsorship of London Stock Exchange as a pre-Local Operating Unit (LOU). LSE will be the only UK based pre-LOU and will allocate a pre-Legal Entity Identifier (LEI) called Interim Entity Identifier (IEI) to legal…
It is known that regulators are continually playing catch-up with technological innovation in financial services, whether it’s HFT trading, being addressed in MiFID II, or internet banking in the new Bank Account Directive. Bitcoin, however, is an entirely new kettle of fish. For a start it’s a currency that comes bundled with its own payment…
At a recent conference, the International Derivatives Expo in London, David Bailey of the FCA said that his organisation ‘will not look kindly on firms which are not prepared [for EMIR].’ ‘The FCA has been doing numerous road-shows and is speaking to a number of trade associations about buy-side regulatory obligations. We have been answering…
On 21st March, the Basel Committee on Banking Supervision released a consultation on its upcoming guidance for the external audit of banks. Auditors have been tarred, along with institutions like credit rating agencies, with having a hand in the poor practices that led to the 2008 financial crisis. The BCBS’ guidance is aimed at distancing…
The long anticipated and much discussed new German high-frequency trading (HFT) law is now formally with us. In brief, Germany has introduced an authorisation regime for entities conducting HFT, but with significant extra-territorial consequences. The law has been passed by the Bundesrat and waits to be signed into law by the German President (probably at…
In the past two weeks, the EBA has issued several consultation papers on the technical standards under the 4th Capital Requirements Directive (CRD IV). One of the papers concerned an important question: When are firms required to report changes to their rating systems and internal models? The answer: Pretty much all the time. Between the…
The newly formed LEI ‘Regulatory Oversight Committee’ (ROC) has released its first progress note. In the time between its formation, the election of members and the handover from the Financial Stability Board (FSB) in January this year, the ROC has been making significant progress. The newly formed LEI ‘Regulatory Oversight Committee’ (ROC) has released its…
Over the past few years, global regulators have introduced new measures aimed at improving transparency. Most of their focus has been on getting a consistent, global view for the supervisors to monitor more granular risks, as evidenced by the BCBS’ Risk Data Aggregation and Reporting Principles and Basel III/CRD IV. One thing everyone knows from…
Yesterday, 4th March, the Council published a compromise proposal detailing a possible final draft of the Recovery and Resolution Directive (RRD). Firms can breathe a mild sigh of relief as the document relents on some of the most stringent requirements. However, the proposal extends the rules in other areas creating a mixed picture overall. The…
Libor, Euribor, Tibor, Noribor… Fines of $1.5 billion, £390 million and more expected across the globe …Fallout from benchmark manipulation is not new news, but the way in which we are driving towards new benchmarking regimes is. Why? Benchmarks are at the very core of the financial markets and even slight regulatory variances can result…
As the global method of identifying entities and their ownership structures, the Legal Entity Identifier forms a central part of the G20’s crisis-prevention toolbox. After a few chaotic years of LEI debate and design, regulators are finally nearing the long anticipated starting line for use of the world’s first singular identifier. The LEI is of…
More stringent restrictions on outsourcing arrangements affecting all suppliers could lead to increased costs across the board for financial services firms. Since the 1980s, outsourcing has been a way to leverage global wage imbalances to lower the cost/income ratios of the banking industry. The rules of the game changed in 2007, with MiFID controlling how…
Conflicting demands of European data privacy and US intelligence gathering legislation are coming together to make the issue a serious problem for banking technologists. Transatlantic friction over data protection isn’t exactly a new problem – the industry has been faced with pending regulations from the US and EU for over a decade. Until recently…
The English High Court handed down an important judgement last year relating to its duties when exercising close-out powers granted to it pursuant to a clearing agreement. The outcome of the case is important to remember as discussions progress in terms of which entities owe what duties in maintaining a “fair and orderly” market, which…
FATCA compliance might not need a separate programme – it ought to be covered by the same approach as AML, RDR and KYC regulations, among others. The recent high profile decision by the board of Wegelin, Switzerland’s oldest bank, to close after helping US citizens evade taxes of $1.2 billion in offshore holdings, has ensured…
What will firms need to solve internally, and what will need industry collaboration? In 2009, the G20 committed, in their action plan, to strengthening risk management controls and policy principles. This was followed up with a 2010 report by the Senior Supervisors Group (SSG), highlighting poor IT infrastructure practices which were having a negative impact…
Andrew Bailey, the freshly anointed head of the new Prudential Regulation Authority (PRA), gave the strongest indication yet of the approach that would be taken to regulating and supervising systemic insurers alongside banks and major investment firms. Reading not very far between the lines, Bailey also seemed to be outlining the approach the PRA would…
Last Friday, the Irish EU Presidency published a new draft compromise of MiFID II. The resulting piece of legislation includes several new additions but preserves - without exception - the more onerous existing clauses. The central changes in the new draft are an obligation for investment firms to trade on a regulated platform (with exceptions)…
The G20 has released its latest progress report following a 15-16 February summit in Moscow - the first meeting under the Russian presidency of the G20. This meeting largely focused on the direction regulation would take in the near future, progress assessment and the effects of reform on the health of long-term investment finance. Overall,…
Multiple 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…