RegTech IntelligenceJWG analysis. With 40+ regulations covering 500+ KYC data requirements due to be implemented over the next 3 years, meeting the requirements poses significant challenges to all firms in the market, not least client outreach, data management and multiple, iterative, implementation dates. Combined with record fines for AML failures, and new personal liability for senior
By Darragh O’Grady and JWG. Regulatory requirements coming in over the next 3 years will mean firms need to know – and prove that they know – more things about their customer than ever before. Combined with the growth of ‘digital banking’, firms are now having to innovate on the digital front, whilst ensuring compliance
JWG analysis. There is a war going on to ‘Know Your Customer’. As regulators continue to release new requirements for firms to collect and maintain information about their clients and counterparties, the struggle to comply has turned into trench warfare fought across many fronts, and new strategies are needed to avoid a long and uncertain
On the 22nd January, over 30 stakeholders from 12 firms met Customer Data Management Group (CDMG) meeting to discuss their 2015 priorities for regulatory KYC requirements. JWG presented a summary of 40+ new regulations that require firms to manage counterparty information over the next 3 years. Alec then presented summaries of the 11 regulations in scope
By Sam Tyfield, Vedder Price. Back in 2009, the EU issued a Recommendation (which has no binding legal effect) on the use and application of RFIDs (which, for our purposes, means ID/swipe/access cards). The EU has just issued a review of the implementation of the Recommendation EU-wide and has found take-up by EU member States
By Darragh O’Grady and JWG. In this fourth article in our Blockchain series, we asked RegTechFS contributor, Darragh O’Grady, what benefits blockchain technology could bring to the establishment and maintenance of trading platforms, particularly Multilateral Trading Facilities (MTF) in the context of forthcoming MiFID II implementation planning. According to MiFID, an MTF is a “multilateral
This summer, we found that the industry could face up to three Eiffel Towers high worth of paper from the G20. Curious about the risks inherent in managing that many documents, we asked Meredith Gibson, Head of Legal Risk at Santander UK, and Helen Pykhova, Director of The Op Risk Company and Chair, Operational Risk
By Darragh O’Grady and JWG. According to the latest LEI research we picked up at FIMA, only 11% of the population of ‘regulated and listed’ companies have so far received an identifier. This got us thinking about what new identity solutions were out there and we called upon our blockchain guru to offer an opinion.
JWG analysis. This summer, we took a look at the emerging MiFID II/MiFIR technical standards and concluded that the ‘hearing’ that they were getting would result in a war of many parts. Since the summer, over 700 MiFID II/MiFIR responses have been submitted, the FCA has run a conference crying for action and JWG is
By Darragh O’Grady and JWG. It is very easy to get confused and overwhelmed by all the crypto-currencies (or math-based currencies) out there. It started out relatively simple with just bitcoin a few years ago. Now other currencies have joined the fray, including but not limited to, Litecoin, Dogecoin, Peercoin, Ethereum, Mastercoin, Counterparty, Ripple, NXT,
JWG analysis. Conduct risk continues to be a hot topic. There is a number of reasons for this: everybody’s being fined for it, there is a continuous stream of regulatory requirements demanding it and -probably most importantly – no-one knows exactly what it is. The FSA provided a definition in 2011 in their Retail Conduct
This article originally appeared in the autumn 2014 edition of Markit Magazine. JWG analysis. The Basel Committee’s principles for effective risk data aggregation and risk reporting (BCBS 239) may be among the least well known components of the post-financial crisis reform package. Yet they could ultimately bring about the most significant changes to the
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
In our previous articles we’ve explored the expanding requirements for robust systems and risk controls under MiFID II, the nature of proportionality as it relates to algorithmic trading and the new accountability implications for senior managers. This article, written by Meredith Gibson, Head of Legal Risk, Santander UK plc and Helen Pykhova, Director, The Op
JWG analysis. At the turn of the century, the framers of the UK’s financial infrastructure rulebook enshrined four fundamental concepts into systems and controls practice. The rulebook in question is the Financial Services and Markets Act 2000 (FSMA), which created the FSA. (The FSA was then subsequently split into the FCA and the PRA in
JWG analysis. We learnt something this month. The reason Europe calls it a regulatory ‘hearing’ is that it is an opportunity to hear views from both regulators and the market. Of course, that’s just part of the experience as many other senses are triggered when 400 people are locked in a basement for 2 days,
JWG analysis. Last month (20 June), the Hong Kong Monetary Authority issued a new Supervisory Policy Manual (SPM) on the topic of recovery planning (Module RE-1: Recovery Planning) following a consultation with Hong Kong’s two industry associations. This follows the Financial Stability Board’s push to implement standards in the area of recovery and resolutions plans
JWG analysis. Regulators across the globe appear divided on the question of whether tighter control of algorithmic trading is necessary. The Australians are pretty laid back about it, the Germans are ahead of the game, whilst political debate rages in the US. Regardless, while the value of algo trading to global markets is generally considered
By Dominic Hobson, COOConnect. If you are a hedge fund manager, it is always tempting to believe that you are too small to be of interest to regulators. Or not the intended target of regulation at all. The fact that resources are too short to understand the detail of every regulation tends to encourage this (potentially ostrich-like) approach.
JWG analysis. The BCBS appears to be putting the screws on national regulators to expand the scope of their Risk Data Aggregation Principles to affect more banks. Now Singapore is the first to react. June has been a busy month for all regulatory agencies, and the BCBS is no exception. With 3 consultations, 2 sets
JWG analysis. In our previous piece we spelt out the breadth and depth of the regulatory onslaught in the context of MiFID II. Here, we unveil how RegDelta can help you redefine the battlefield. What is RegDelta? RegDelta gives firms the ability to control global regulatory challenges. RegDelta is a financial services regulatory data management
JWG analysis. For the past decade we have been making sense of the changes regulators want to make … and it’s not been easy. JWG has worked with over 100 financial institutions, dozens of trade associations and regulators in several countries to mirror the detailed compliance requirements specified by the regulatory agenda to help define
In our previous article we looked at the current surveillance regime in Europe and the challenges of extending it. See here for more background on the 860 questions that need to be answered by 1 August. While not comprehensive, this will help describe three issues that should be on your checklist: context, identification and linkage.
As debate rages across the Atlantic today over controlling HFT in Chicago, we’ve been digging into ESMA’s 42 pages on transaction reporting in its MiFID II discussion paper. See here for more background on the 860 questions that need to be answered by 1 August. Years after Dodd-Frank upgraded the surveillance capability of the US,
JWG analysis. Our jaws hit the floor when it was revealed at our CDMG meeting last week that ESMA’s MiFID II technical standards are expected to be in excess of 800 pages with more than 800 questions to be answered by August 2014. And this is just the start. ESMA’s 2014 work plan has over
JWG analysis. Without a consolidated viewpoint on what new risk data requirements mean, firms will be at a loss when it comes to determining best practice. We are in the middle of a massive, global industry transformation with many rulebooks. With divergent regulatory timelines, standards and existing data architectures a common and holistic ‘best practice’
By Sam Tyfield, Vedder Price. Algo flagging is currently only the concern of direct members of German venues. But it’s going to have a much broader application under MiFID / MiFIR and become of concern to the buy-side too. Yesterday, the good Doctor Voigt of Fidessa published a blog about algo flagging. It is well worth
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. Last week, Nasdaq OMX became the first infrastructure provider to be authorised as a Central Counterparty (CCP) under the European Markets Infrastructure Regulation (EMIR). The decision sent waves of mild panic rippling through the OTC markets, putting the focus back on an issue that was already predicted to pose problems for European banks
Video: Regulatory reform – 2014 helicopter view. Regulation is coming thick and fast. Seventy thousand pages a year fast! Dealing with this deluge with a page-by-page, regulation-by-regulation approach is becoming impossible as the G20 commitments become spread across many rulebooks. This means that firms trying to tackle the changes one-by-one will end up with sky-high implementation
JWG analysis. This week marked the one year anniversary of EMIR’s first implementation deadline. And what a difference a year makes … or does it? This time last year, banks and their customers were busy determining who had passed certain thresholds (determining who would be classified as NFC or NFC+), along with implementing confirmation processes
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. If you’re reading this post, then it’s more than likely you are in one of the many job roles that are impacted by financial regulation. Whether you are directly involved as COO or a legal, compliance, governance or risk officer, or indirectly involved in an operational, IT or business capacity, it’s clear that
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. When the requirement brought about by the German high frequency trading act to tag algorithms comes into force in April of this year, market participants may well feel hamstrung by the complexity of the regime. And while the regulatory goal of improving market surveillance and reducing systemic risk may be valid, some might
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
JWG analysis. Until the world has a definitive LEI, we are going to have to recognise that piecemeal adoption brings with it significant hidden costs in validating, enriching and mapping for regulatory purposes. LEI watchers have been encouraged to see Saudi Arabia and Italy joining the fold in the past month. They might be just
By Sam Tyfield. In November 2013, the EU Commission published a draft Directive on “the protection of undisclosed know-how and business information (trade secrets) against their unlawful acquisition, use and disclosure”. All else being equal, we may expect the Directive to be put into national laws within the next four years. Notwithstanding the extended timetable,
JWG analysis. With the 12 February EMIR trade reporting deadline just around the corner, the atmosphere in the derivatives industry suggests just as much turmoil as ever. Issues surrounding LEI registration, UTI reconciliation and trade repository affiliations persist as the rush to comply with mandatory reporting rules begins. The industry is still grappling with issues that
JWG analysis. In late October, the European Banking Authority (EBA) released a consultation on the use of the Legal Entity Identifier (LEI) for CRD IV’s risk reporting requirements. Now that the consultation phase has been concluded, firms may only have around 60 days to register LEIs for all their entities that report under CRD IV.
By Tristan Dehaan, Market Data Vendor Manager Following a robust market data discussion on RegTechFS, we asked Tristan, a Market Data Vendor Manager at a European Asset Manager, to tell us about his efforts to help the industry get to more client-friendly market data contracts. At the end of 2012, speaking as a well-placed member of
JWG analysis. With 9 working days to go before compulsory reporting of derivatives trades becomes a daily reality, firms are in the final phases of implementing their individual solutions. These differ from firm-to-firm, for example some are planning to report in real-time (as in the US), while others plan to report later within the T+1
Trade reporting for EMIR begins in February 2014 and firms are beginning to register their entities (and their clients) for LEIs in order to meet the deadline. However, registration volumes are set to increase as the EBA’s recent consultation paper indicates that the LEI will be used for CRD IV risk reporting, significantly expanding the
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
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
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
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
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
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
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,
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
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.
SIFI assessment criteria are becoming increasingly stratified and are coming to financial institutions near you. Higher capital surcharges, ring fencing, ‘unplugging’ and new living will reports are all parts of a solution to combat ‘too big to fail.’ Some economists contend that the banks that are too-big-to-fail enjoy a lower cost of capital because they
Most of what the MEPs voted into law in July required ESMA to define exactly what they meant in their record keeping demands legislated through EMIR. Unfortunately, a few clauses slipped through the net in the drafting process… One of these was regarding record keeping which, according to experts, means that, as of 16 August,