RegTech IntelligenceLast week, over 30 organizations including regulators, global financial institutions, trade associations and vendors met under the auspices of JWG’s Regulatory reporting special interest group (RRDS). In this 27th meeting on regulatory reporting the group examined the feasibility of integrating prudential/statistical ‘top down’ or more aggregated reporting (e.g., CRR 430C, ESG) and ‘bottom up’ or more transactional data collection (e.g., EMIR, MiFID, CSDR). So far
Training materials for Cohort 3
Following our discussion of several global accountability regimes and forthcoming culture audits we are turning our attention back to AI. This is a very noisy space with Germany, UK, Japan and the US all mandating new controls in advance of MiFID III update which could raise the algo trading bar even higher. In this
Last week marked a key turning point for the derivatives industry as it moves towards aggressive implementation deadlines for regulatory reporting on either side of the Atlantic. After a decade of international regulatory reporting the sector is marshalling resources to meet new CPMI/IOSCO implementation mandates for newly standardized common data elements. A poll
It was agreed that the programme was on target to delivering an EMIR Refit-ready Common Domain Model (CDM) for all asset classes in scope of the regime in Q1 22. This will give firms ample time for integration and testing in advance of the anticipated go-live date which is anticipated to be Q4 22. Members also expressed their support for launching a US-focused project on CFTC implementation as part of the Global DRR programme.
As will be noted in the forthcoming minutes of the second Global Derivatives DRR Programme oversight Committee (POC2) meeting, some members expressed their support for a US-focused project on CFTC implementation. We have agreed to work with US ISDA colleagues to convene a meeting to review potential CFTC project objectives, risks and targets with
Sponsored by Accountability is a theme that has been on the industry’s to do list since the Great Financial Crisis. Five years since new senior management regimes started rolling out, global regulators are already raising the bar to include front-office culture audits which apply behavioural science to new culture and conduct measurement. New JWG research
Presentation from SIG meeting on 18 May to review updates to the trade surveillance regulatory agenda, review global accountability regimes and agree priorities for RegTech and SupTech tooling.
Digitization ramp-up and continued focus on CDE and EMIR Refit field modelling to deliver output that can meet ESMA obligations and help with the delivery of CFTC reporting requirements in 2022.
Inputs: ─Firm expectations of key milestones and dependencies for EMIR Refit and CFTC ─Draft planning assumptions to be challenged in POC2 (see objectives below) ─1 representative per organisation DRR programme planning session objectives: ─Targets. Set DRR MVP for the year: deliverables by quarter by regulation ─Modelling rates. Review Digitizer progress to date ─Interdependencies. Key dependencies
We are pleased to release our 7th RegCast today. Cries for faster, better, and cheaper access to financial services by millions of investors have shaken the markets this year. With advice out of reach for most individuals racing into the markets, they are placing risky bets which are poorly understood. In this episode, Jackson Mueller, Seccurrency, Sam
We are pleased to release our 6th RegCast today. Rachel Wolcott takes the chair to talk to Dawd Haque, Deutsche Bank, PJ Di Giammarino, JWG and Leo Labeis, Regnosys about the industry’s ground-breaking collaborative effort to get derivatives trade reporting right. The group explains how over a dozen sell and buy-side firms are rolling up
The group met to discuss the impact beyond the broadsheet news of GameStop hearings on wholesale and retail surveillance agendas and the impact on how firms manage conduct and culture risk?
16 March 2021 TSS 23: GameStop, Conduct Risk, Culture and KPIs Meeting objectives The group met to discuss the impact beyond the broadsheet news of GameStop hearings on wholesale and retail surveillance agendas and the impact on how firms manage conduct and culture risk? TSS Members can access to the 21-page presentation in the members’
We are pleased to release our 4th RegCast today. In this episode Angus Moir, Bank of England joins us to share UK’s plans for Transforming data collection and to pick up with former UK regulator Gavin Stuart where we left off in RegCast 3. We focus on digital capabilities required for investment firms to share information with their
Many U.S. and European globally systemically important banks (G-SIBs) have seconded staff to a digital regulatory reporting project that mutualises derivatives reporting rules interpretation, expresses those rules as computer code in alignment with trade association- agreed best practices. The project is training 25 G-SIB-supplied specialists to study the data fields required for the European Market
We are pleased to release our 3rd RegCast today. This episode shines a spotlight on the new. digital capabilities required to track neo brokers, digital influencers (e.g., roaring kitty) and the new on-line herds of citizens that can influence market pricing (e.g., GameStop). Picking up with Sam Tyfield, Rachel Wolcott and Gavin Stuart where we
It has been a very busy 2021 and it is a very noisy financial services regulatory marketplace. JWG is pleased to be helping to contextualise the strategic issues in play with a new podcast series called RegCast which you can access here. So what is RegCast? RegCast is an industry spotlight on the business
Digital regulatory reporting – tipping point 2021 By PJ Di Giammarino, CEO JWG Group New JWG research has found supervisors to be focused on creating new standards for interpreting complex data needs in 2021 as the industry hits a tipping point for in its quest for digital standards that simplify complex regulatory reporting obligations. Global
Collaboration to finally realize GFC reforms via digitalization The good news about compliance is that financial firms are finally getting the last generation of G20 Global Financial Crisis (GFC) regulations under control, said PJ Di Giammarino, CEO of JWG, a financial regulation think-tank based in London. The not so good news is that the industry
JWG’s 2020 research has found that the financial services market exhibits an ever-growing blind spot from technology risk which lurks off balance sheet. High profile outages like Google and Microsoft have underlined the issue for both the regulator and regulated this month. This point has not been lost on regulators who in the middle of
Can suptech take DeFi to the next level? As technology-driven decentralised finance (or DeFi) grows in popularity and market value, it appears that a battle is brewing between DeFi protocols and regulators. But can technological tools in the hands of regulators head this off at the pass? A reasoned, transitional approach to compliance, along with
The global regulatory community has put its support behind digital regulatory reporting (DRR) initiatives acknowledging supervisors require the ability to collect better quality data more efficiently. The Bank of International Settlements (BIS), the European Commission, the European Banking Authority (EBA), the European System of Central Banks (ESCB), the Financial Stability Board (FSB), the U.S.’s Federal
By PJ Di Giammarino, CEO JWG and Chair RegTech Council Key points: Regulators are being hampered in their risk oversight duties by poor data quality and over £100m in fines were issued in 2019 for poor reports EU and UK regulators are out in front of global efforts to correct the rocky start on
By PJ Di Giammarino, CEO JWG Group and Chair of the RegTech Council In the aftermath of the global crisis, financial regulators rushed to implement complex rules without having a complete view of their consolidated impact and how the technical infrastructure of the industry would have to respond to their new demands for data. After
Our industry has gotten serious about its approach to climbing the RegTech mountain. Are we sprinting yet? Certainly not, but the course has become much clearer, the participants much more engaged and the contestants in it for real benefits. Public and private sector boards are at a crossroads – but by and large, we are
With MiFID II now (mostly) implemented, what trade and transaction reporting initiatives will firms have on the agenda for 2018 and beyond? We list some of the key items below: It is estimated that the final revised text of the European Market Infrastructure Regulation (EMIR) under the REFIT programme will be published at end of
When 350 senior individuals from more than 65 financial institutions, as well as the vendor and regulatory community, met at this year’s JWG RegTech Capital Market Conference ‘innovation’ was at the top of everyone’s agenda. Perhaps this is not surprising – given the new disruptive technologies being controlled in a fast-changing, and fiercely competitive market.
2017 saw significant developments in financial and regulatory technological innovation – and many regulators have been moving in parallel. What is going on? In a nutshell, the global collaborative fabric is coming together. Of course, the landscape for global collaboration is by its very nature a patchwork that reflects differing policy objectives across the globe.
As we head into the final MiFID II implementation straight we publish our latest RegBeacon, but our message to the industry is that the ‘end’ is far from sight. We are becoming firm believers that there will be more work done to deliver this set of changes after the due date, than in the run
Since President Trump’s signing of Executive Order 13772 back in February 2017, the Financial CHOICE Act has passed through the House of Representatives with a 233 to 186 vote. The substantial bill that was approved by the House, referred to as FCA 2.0, included new additions that have built upon and contradicted some actions from
Following one of the Trump administration’s financial executive orders, the US Treasury Department issued a report which calls for regulators to streamline reporting obligations and review their coordination efforts, incorporating greater accountability and clarity into examination procedures and data collection requirements. The request mirrors commentary from European Central Bank President Mario Draghi, who, during his
On 12 June 2017, the US Treasury released the first in what will be a series of financial regulatory reports in accordance with Executive Order 13772 signed by President Trump. The publishing of “A Financial System That Creates Economic Opportunities – Banks and Credit Unions” now gives us a better understanding of what the future
Over the past quarter, we have made considerable progress towards the creation of a RegTech Council. In this members-only issue we cover our latest activity in the RegTech arena including: The progress of our new RegTech SIGs – The restructured membership groups are broadening and improving our coverage MIG update – With 6 months to go, firms are moving from
On 3 February 2017, President Trump announced in a press briefing that “we expect to be cutting a lot of Dodd-Frank” because “so many people, friends of mine, with nice businesses” had been stifled by regulations and therefore faced difficulties acquiring loans. Later that day, Trump signed Executive Order 13772, which established the agenda for
The current buzzwords circulating around the media, “digital revolution”, succinctly capture what is occurring in the futures markets. With automated trading now constituting up to 70% of trades in regulated futures markets in the US, a modern-day Gordon Gekko would be using a cutting-edge code to create an automated trading system rather than relying on
The plight or health of community banks has become a key weapon in the war between supporters and critics of Dodd-Frank and even financial regulation in general. The unmistakable decline in the number of community banks is used by many as an example of why the 12,000+ page legislation is flawed, as it supposedly hurts
The Federal Reserve Board published a final enhanced supervision rule, known as Regulation YY, on 18 February, 2014. This regulation implements certain provisions of Section 165 and 166 of the Dodd-Frank Wall Street Reform and Consumer Protection Act to establish enhanced prudential standards for large US bank holding companies (BHC) and foreign banking organisations (FBO).
The Foreign Account Tax Compliance Act (FATCA) has become infamous for its unintentionally damaging effect on the average American expat, as many foreign financial institutions (FFIs) attempt to mitigate their paperwork and risk by denying custom to American citizens according to expat groups with mainly anecdotal evidence. Groups protecting US expats are proposing tweaks to
Several large Wall Street banks, including Goldman Sachs, Morgan Stanley, and J.P. Morgan, have requested five more years to comply with the Volcker rule, in order to sell their holdings which will become more difficult to sell as the summer deadline moves closer. If their request is accepted, it will give them until 2022 to
With the upcoming presidential election on 8 November 2016 and Trump’s growing popularity in the polls over the past few months, it is becoming increasingly important for regulators, banks and other financial institutions to gain a greater understanding of his economic agenda. Well before he launched his current campaign, Trump attacked increased regulation following the
Last week was an embarrassing week around the globe for a number of high profile politicians, sports personalities, multinationals, law firms, the rich and the famous. The leak of the Panama papers – a data leak of almost 11.5 million documents, concerning the tax affairs of many – brings into sharp focus an agenda that
JWG’s recent series on the emerging regulatory barriers and issues in FinTech, does an excellent job of setting forth the main issues for what is sure to be a busy few years of calibration for regulatory compliance and reporting. The emergence of RegTech, roughly the ways in which the adoption of new technologies can help
In the post-Easter week, regulators were busy shining a spotlight on remuneration practices in the industry. We saw the EBA releasing a report looking at the high earners in EU banks and ESMA focusing on sound remuneration policies under the UCITS Directive and AIFMD. The FSB also met in Tokyo to discuss their priorities for
FinCEN’s proposed rules on beneficial ownership due diligence, the incoming 4th Money Laundering Directive (AMLD IV) and now the UK’s Register of People with Significant Control (PSC) Regulation all push for more transparency in beneficial ownership or significant control of companies. The aim is to reduce acts of money laundering and tax evasion and to
A brief exchange of correspondence between regulators over the last fortnight has brought aspects of MiFID II’s regulatory technical standards back into question. On 14 March, a letter from the European Commission to the European Securities and Markets Authority (ESMA), seen by Reuters, requested that the technical standards on position limits be rewritten, with the
The attacks in Paris and the continued threats posed by the Islamic State of Iraq and the Levant (ISIL) have once again seen fresh emphasis placed by financial regulators around the world on countering terrorist financing and money laundering. The Financial Action Task Force (FATF), a Paris based intergovernmental body that sets standards and promotes
On 15 February, ESMA released a discussion paper with the purpose of consulting stakeholder opinions on the technical implementation of the incoming Benchmarks Regulation. This regulatory process was initiated on 18 September 2013 at an EU level when the Commission published a legislative proposal for a new regulation on benchmarks, which falls in line with
This week, the EU commission published the responses to their call for information on the impact of EU regulation so far. The FCA’s response, also published this week, has been similar to other feedback in citing the constraints on both the banks and the real economy of financing themselves, overly complex reporting obligations and spill-over
In the past month, we’ve celebrated the holiday season and brought in the new year, but there has been no rest for the wicked and regulators have been busy scrambling to meet deadlines and push out new regulatory documents. In the period before Christmas, we witnessed a lot of developments and it’s safe to say
Over the last week, regulators have been signalling that they will not be tolerating risky or illegal finance in 2016 any more than in the previous year. Margin requirements are back on the table, along with bankers’ remuneration and fines – plenty of fines. Despite this, the inquiry into the UK FCA’s scrapped banking review
On 24 November 2015, the US Commodity Futures Trading Commission (CFTC) unanimously approved a notice of proposed rulemaking addressing several issues related to automated trading. These proposed rules have been collectively termed ‘Regulation Automated Trading’ or ‘Regulation AT’. Regulation AT has been designed to reduce the likelihood of automated trading disruptions and potential risks and
Financial regulation remains as complex as ever. Complex new niches such as shadow banking, Fintech, and Over-the-Counter Derivatives, and the increasing interconnectedness of Financial Institutions (FIs) across the world, have led to greater risks to be managed for regulators. With this in mind, how they manage to get ahead of these rapid financial evolutions and
JWG analysis. On 7 September, the EU published a statistic showing that, according to the EBA, the percentage of high income earners that have a material impact on an institution’s risk profile has increased from 53.68% to 59.00%. They stated, though, that this trend is likely to change in the future following the adoption of
JWG analysis. Last week we wrote about thwarting financial crime through suspicious transaction reports (STRs) in the UK, and the Financial Conduct Authority’s (FCA) concern over the integrity, accuracy and coverage of STRs. On the other side of the Atlantic, FinCEN is proposing to extend their anti-money laundering (AML) regime to investment advisers. Closing
JWG analysis. It’s only Tuesday and already this week we’ve had some big headlines in the financial services world. On the other side of the Atlantic, Banamex USA was fined by federal and state banking regulators for failure to implement adequate safeguards against money laundering transactions. Perhaps even more significant news is the recent conviction
JWG analysis. On 21 July 2010, President Obama signed the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank for short) into law. Since its inception, the number of pages of Dodd-Frank related rules has risen to 22,296, representing over a 550% increase on the 4,049 pages released in the first year. It may have
JWG analysis. Just as firms are getting their heads round reporting for FATCA, the OECD’s Common Reporting Standard (CRS), together with its band of early adopters, pops up. Much has been written on comparing CRS with FATCA, highlighting that there is little to fear for there are synergies to be found. If you are one
JWG analysis. In part 1, we focused on the consultation paper published by the FCA on 7 July, CP 15/22, in which the UK’s financial regulator proposed that managers responsible for algorithmic trading should also be covered under the new Senior Managers and Certification Regime. But, as many readers will know, it is not only
JWG analysis. The chief of the CFTC pronounced from Japan this week that implementing regulatory reform means overcoming “legal traditions, regulatory philosophies, political processes, and market concerns”. Looking at the global trading regulatory climate that surrounds MiFID II, we couldn’t agree more. Those struggling to digest the MiFID II texts and get to Paris for
JWG analysis. 2015 will see a number of new regulatory requirements, long in the proposal or draft stage, crystallise into prescriptions for better customer data management. At a time when record fines for AML failures and new personal liability for senior managers have intensified the pressure to ‘get KYC right’, these ‘remedies’ pose significant challenges
JWG analysis. The challenges of gaining oversight over the financial system are not going unnoticed. We come back from the summer holidays with 5 leading indicators that suggest we are on the brink of bad news. Bad news that is likely to spread far and wide. Firstly, in a new report, the US Government Accountability
JWG analysis. While the US HFT debate rages and the FBI launches its investigations, Europe is quietly preparing to set a hard-hitting set of new rules for technical standards. When ESMA begins its consultation around MiFID II / MiFIR tech standards this summer, market participants will need to have their ducks in a row and
JWG analysis. Earlier this month, New York Attorney General (NYAG), Eric Schneiderman, set out his stall with a scathing attack on high frequency trading firms and their practices. Describing HFT firms as ‘parasitic’ and comparing their strategies to “Insider Trading 2 .0”, the NYAG’s statement would have been music to the ears of financial luddites
JWG analysis. Once MiFIR is enacted over the coming months, there will no doubt be a lot of concern about one little word that threatens to have a serious impact on the commercial operations of many service providers in Europe. That word is ‘reasonable’. By itself, the word reasonable seems harmless. But when used as
JWG analysis. There is a new film making the rounds where the evil ‘Lord Business’ locks up all the master builders in a think-tank and uses them to design his empire. Quite apart from giving JWG analysts a lot to laugh about, it’s a useful theme when exploring what is going on with OTC trade
JWG analysis. “When a tree falls in the woods, does it make a noise?” While some may find the question trivial, it has provided much food for thought for philosophers since it was first raised in the early 1700s. The answer to the question relies on one’s assumptions on whether observation is a necessary condition
JWG analysis. The road to mandate trading of OTC derivatives on electronic trading platforms will be long but, without a harmonised approach on both sides of the Atlantic, the process will be fraught with challenges. Although the core principles and requirements for Swap Execution Facilities (SEFs) were articulated by the CFTC at the beginning of
JWG analysis. The Fed made some concessions in timing and scope, but pressed ahead with measures to insulate the US financial sector from future bailouts earlier this week. The news stoked fears that European regulators may look to reciprocate, triggering a race to the highest common denominator when it comes to determining capital buffers, and potentially
JWG analysis. The first 700 of 18,000 pages of MiFID II texts have now been published, a little more than a month after the European Commission announced agreement in the trilogue process, but this milestone foreshadows a confused standards landscape that will stretch forward to implementation of the regulations and directives in 2016. For those
JWG analysis. EU and US taxpayers scratched their heads in disbelief this week as the regulators made it painfully clear that they have squandered both years and billions with little to show for it. The politicians that gathered in Pittsburgh were quite explicit – they want OTC transparency. Did they expect that, nearly five years
JWG analysis. When G20 leaders met in Pittsburgh back in September 2009, there was clear consensus on the direction that the financial industry needed to take in the aftermath of the global financial crisis. Transparency was a key theme. The view was that, by mandating industry-wide reporting obligations for OTC derivatives, regulators would be armed
Big changes are happening at the CFTC: With the departure of Gensler, and the swearing-in of acting Chairman Mark Wetjen, everyone knew that there would be a change of approach. However, the scale and speed of that change has come as a surprise to many. In fact, almost the moment Gensler stepped out of the
Today, a final version of the long-awaited Volcker Rule has been published by the five US agencies involved in its drafting. The rule as finalised is something of a victory for banks owing to multiple broad exemptions and an extension of the timeline. However, there are many questions still outstanding, and implementation will be a
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
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
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
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
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
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
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.