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…

Time to review your money market strategy?

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…

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…

FATCA delayed six months

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…

EMIR vs. Dodd-Frank: Just choose one?

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 approved as first French pre-LOU

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 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…

Bitcoin: A new regulatory frontier

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…

Buy-side unprepared for EMIR?

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…

The LEI: between a ROC and hard decisions

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…

Outsourcing: increasingly risky business?

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…

Data protection: the next Y2K?

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…

Kill ’em all: Let the broker sort them out!

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: Joining the KYC dots

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…

Celtic Tiger Shows its “Clause”

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)…

G20 update for 2013: from Russia, with love?

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…

EMIR: back on schedule?

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…

HFT: Time to talk about how?

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…

Shadow banking: it all starts with data

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…

Out of the shadows, into the rulebooks?

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…

2013: A very new year

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…

RRPs: Operational deluge coming soon for FMIs

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,…

A common roadmap for Europe?

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…

OTC: Will your firm make the grade?

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…

A long road from theory to policy

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…

Check your SYSC benchmarks

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…

The cost of not monitoring your customer

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…

HFT: On the brink of definitive new controls?

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.…