The pace and depth of regulation is breaking the traditional model for compliance, but new digital tools are emerging to fill the void.
The rule set is vast and a potentially relevant document is published every minute on one of thousands of URLs. In 2020 alone, JWG filtered through 700,000 alerts from more than 700 bodies that issue financial services rules across the globe to net 24,000 relevant documents with a total of 380,000 pages.
Regulations now go ever deeper and more invasive – including on AI, microstructural controls, testing, data, cloud, third party risk management.
This complexity and speed of change makes it even more difficult to use the old fashioned compliance frameworks which rely on box ticking and multiple lines of defence.
Pioneers from private markets have found new ways to leverage the block chain to revolutionize compliance and it has an enormous market impact.
Through DLT, compliance is being tokenized, workflows are being certified, clients credentialed and new economic activity stimulated – all with regulatory transparency. JWG talks about this as digital compliance – which meets customer expectations in safe, trusted, transparent interactions in a democratized market.
By digitizing compliance you can better prove your infrastructure controls. For example, when you change algos you can test them as part of your workflow, certify that they passed and prove it to the market and your regulator.
JWG has long argued that to be compliant, we need a core data backbone of the regulation itself so that the multiple interpretations can be tied back to the source and prove compliance.
What is the digital compliance prize? We increase liquidity in the markets, brings costs down for the asset managers and brokers and increase the safety of the system. Some argue that it can even take DeFi to the next level.
In this episode, Dan Doney and Nick Idelson spell out what this means for the markets and articulate a compelling vision for the next generation of RegTech and SupTech that you won’t want to miss at JWG’s annual conference.
- To join the JWG Trade Surveillance special interest group, email Corrina
- Access the JWG Surveillance LinkedIn here or Trading here
- To create your own JWG RegTech Intelligence Hub, sign up here
- To register for JWG’s 16/17 November 2021 conference, see here
More RegCasts on digital compliance
- RegCast 15: Implementing RegTech control solutions here
- RegCast 10: MiFID III & Digitalizing Markets here
- RegCast 12: NextGen SupTech reporting here
- RegCast 6: Digitizing derivative reporting with DRR here
Speakers and Guests
PJ Di Giammarino
Aired on: January 27, 2024
Aired on: September 17, 2021