Episode 2
Digital fixes to broken regulatory machines – a UK case study

RegCast 2 covers the UK’s fast moving political and regulatory review process, the key questions they are addressing, and what they are likely to mean for regulators, regulated and their customers. The group discusses past choices and explores the implications of digitizing the future regulatory framework including splitting retail supervision, regulatory reporting and common standards.

Picking up with Sam Tyfield, Rachel Wolcott and Gavin Stuart where we left off in RegCast 1, this episode turns our spotlight on what it takes to implement a more digital regulatory framework.

We discuss the critical decisions facing the UK, failings of the past and the “so what” for wholesale and retail business. Overall, the SMEs conclude that the UK now has a supervisory model that is not fit for purpose and that much more precise data and better analytical tooling is required. They identify digital regulatory reporting for smaller firms as key to getting the new model right, and that ultimately, the “so what” for firms is that the number of constraints on what products can be offered to their clients will go up. They also put GameStop in context and foreshadow important political hearings that likely result in important Market Abuse rule changes.

Key highlights:

• “What you have is a (supervisory) model that is getting bigger and bigger and bigger… and the tail of firms has become longer and longer… and there are a lot problems in that tail which are hard to spot if regulators don’t have great systems”
• “The one regulator model doesn’t work…. the machine as such is not broken, it is just not fit for purpose.. we are fighting a losing battle here”
• “Digital Regulatory Reporting (DRR) would change the whole landscape … because you would have much less of an apples and oranges problem”
• “The tail (of smaller firms) present real risk and are the best candidates for digital reporting”
• “You have to be able to look across, you have to have the bridges (between businesses), none of this is easy”
• “EU regulators are looking at GameStop is a market integrity problem… Roaring Kitty is a black swan market abuse event … and some of these people in the US will be going to jail”
• “If you are  really going to protect consumers you are going to have make products safer … and this probably means capping innovation… and the more ‘caveat emptor’ disappears into  the distance.”

Key topics:

• HMT Future Regulatory Framework (FRF) consultation
• Treasury Select Committee testimony from Andrew Bailey, Governor BoE
• New UK Prime Minister’s commission lead by Ian Duncan Smith
• UK Dame Elizbeth Gloster report findings
• Forthcoming US and EU GameStop hearings
• RegCast Episode 1

Speakers and Guests

• PJ Di Giammarino

  CEO, JWG

• Gavin Stewart

  Director, Financial Services Group, Grant Thornton

• Rachel Wolcott

  Senior editor, risk and compliance

  Thomson Reuters Regulatory Intelligence

• Sam Tyfield

  Partner

  Shoosmiths

Related Podcast Content

• Article

  JWG shines a spotlight on FS digitization with the launch of RegCast