RegTech IntelligenceJWG 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,