RegTech IntelligenceBy Corrina Stokes RegBeacon illuminates the path for JWG’s third decade It is with pride that we publish the first update from our third decade of working collaboratively to enable better, faster, cheaper and safer regulatory change within Financial Services. It is staggering to step back and look at the breadth of our research agenda. Last year we dove into AML,
By PJ Di Giammarino, CEO JWG Key points: In 2019 JWG tracked 204,469 pages with 60 million words on FS regulatory reform 8 RegTech discussions require senior management attention now and will be debated under Chatham house rule with audience Q&A 6+ regulators, 12+ firms and 8 tech SMEs will debate winning strategies and
By PJ Di Giammarino, CEO JWG and Chair RegTech Council Key points 10 January marked the first day of 5MLD in the EU with new UK procedures announced JWG has been out in front of tough new UBO data quality requirements RegTech offers exciting opportunities to reduce operational pain and increase safety The RegTech Council
As the European Union starts to roll out its Fifth Amendment of the Anti-Money Laundering Directive (AMLD V), financial criminals continue to become more sophisticated and less detectable. With an 18-month transposition period, it is critical for firms to implement the new, more prescriptive rules efficiently and effectively. Join us and 20-plus firms at the
On 19th April 2018, the European Commission, the European Parliament and the Council of the European Union agreed adopted, in plenary, the amendment of the Fourth EU Anti Money Laundering Directive (Fifth EU Anti Money Laundering Directive (AMLD V)). The revised directive concludes two years of negotiations between several stakeholders; and looks to strengthen the
At JWG we are pleased to announce our involvement with the FCA this month at their AML & Financial Crime International TechSprint. This TechSprint will attempt to increase understanding of how to increase the hit rate of detection of $1.6 trillion of illicit proceeds up from 1%. Clearly, there are real benefits to be had!
2018 has started at quite a pace, with running our biggest conference yet, pressing forward with our SIGs and RegTech Council collaboration as well as onboarding new RegDelta clients. Our Q1 message to the industry is that the RegTech agenda is starting to make real progress, however the ‘end’ is still far from sight. In
In our previous article Trade Surveillance: restructuring the business landscape[1] we identified how holistic regulatory requirements are forcing banks to re-consider the makeup of their operational structures. Our follow-up research has revealed the severity of the situation and how the industry is reacting too slowly. Trade surveillance, if not executed correctly, can result in financial
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.
One of the hot topics at our Capital Markets Conference this year was how RegTech could help institutions with their Know Your Client (KYC) obligations. With an expert panel from a range of backgrounds presenting fascinating perspectives on this current issue, a issues were given fresh attention ranging from artificial intelligence (AI), blockchain, data architecture
Several interconnected global trends have heightened the risk banks face when combating financial crime. First, regulators are continually revising rules as they expand their focus from organised crime to global terrorist networks, many of which have grown more sophisticated in recent years. Second, integrated networks and an increase in cross-border transactions have left gaps in
The past year has been illuminating for the RegTech market, the past twelve months has seen an increase in discussion on the application of technology to regulatory compliance. We have seen action from the regulators, including the FCA’s recent TechSprint in which we at JWG were involved, and major regulatory initiatives, most notably MiFID II,
In Megan Butler’s speech on creating a more effective approach to combatting financial crime, she posed the question “can technology help make your compliance processes slicker, more efficient and more effective?”. For combatting anti-money laundering and developing an effective KYC framework, the answer is a resounding yes. Firms that operate on a global basis will
One of the many weaknesses that the financial crisis exposed was the feeble transparency framework in financial markets. In response, MiFID II and MiFIR built on the regulatory agenda of the G20 by aiming to strengthen the transparency framework of markets in financial instruments, including OTC trading. Building on MiFID I, the second incarnation extends
IMeta, a leading global provider of client data management software and services, today announced it has selected JWG’s RegDelta platform, the leading regulatory change management platform, to provide a full regulatory rule set for the iMeta Client Lifecycle Management platform. JWG’s RegDelta platform allows thousands of pages of detailed operational obligations to be organised, interpreted
Blockchain is not something new to the financial sector. In fact, it’s been around for years. It will be, however, a slow process to integrate it into systems already in place and, as with any disruptive technology, for regulators to assess and mitigate its risks by regulating appropriately. Although the technology isn’t novel, regulators now
Distributed Ledger Technology (DLT) is currently a hot topic for financial services, and with good reason, as banks are looking for efficient solutions to costly and cumbersome regulatory burdens and this is exactly what DLT promises to deliver. One of the key areas where there is clear application for this is in meeting Know Your
JWG are proud to announce that registrations for our second RegTech Conference on 28 February 2017 have topped 300 from over 50 firms, regulators, standards bodies and leading technology companies. After five years and hundreds of articles from our analysts on www.regtechfs.com and 47 special interest group meetings on regulatory implementation in 2016 alone, we
On 19 January 2017, MEPs rejected the European Commission’s blacklist of countries at risk of money laundering and terrorist financing as being ‘too limited’. The rejection suggests that the list should be broader, by including countries that facilitate tax crime, for example. The list from the Commission contained the names of 11 countries, including Afghanistan,
Following on from last month’s Q&A on commodity derivatives within MiFID II/MiFIR, on 17 January ESMA published its guidelines for the disclosure of inside information on commodity derivatives and spot markets under the Market Abuse Regulation framework. This publication is a response in accordance with Article 7(5) of MAR, that expresses ESMA to be the
The European Commission proposed on 21 December 2016 to strengthen Europe’s criminal law framework to combat money laundering by drawing on international standards to establish minimum rules for defining criminal offences, imposing sanctions in relation to money laundering and improving cross-border cooperation between Member States. In the press release, Commissioner Avramopoulos stated that this proposal
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
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 Customer Data Management Group (CDMG) March focus was the soon to be implemented (3 July 2016) Market Abuse Regulation (MAR). JWG have created a set of rule interpretations for MAR which have been incorporated into our regulatory platform, RegDelta. The March CDMG also included a rule interpretation segment, where participants ‘deep-dived’ a few of
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
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
Continuing on from part 1, where we discussed the European regulator’s priorities for Credit Rating Agencies (CRAs) and Trade Repositories (TRs) for 2016, we now look at the nature and focus of the work the regulator plans to carry out this year to promote supervisory convergence. In October 2015, the European Securities and Markets Authority
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
The market abuse regulation (MAR) is fast approaching and will impact not just financial services firms, but also any EU listed company. Identified in a number of articles published here on RegTech, and discussed at JWG’s CDMG, (customer data management group), which focused on MAR/MAD changes in August last year, the regulation will involve a
On 28 January 2016, ESMA published a paper consulting on a number of draft guidelines falling under a fraction of the Market Abuse Regulation (MAR). This consultation paper was based on a previous discussion paper, issued by ESMA on 14 November 2013. In particular, the paper covers the mandates placed on ESMA to produce guidelines
Following the announcement of a landmark deal on international cooperation over tax avoidance last week, Tuesday saw the signing of a transatlantic pact on data transfer. Even when the EU are in the process of stocktaking the cumulative effects of regulation so far, there is clearly no break in the ongoing pace of financial markets
After a long week at Davos, there are a number of interesting conclusions from this year’s World Economic Forum. China appears to have come out less of a worry than it was when it went in, with the IMF’s Christine Lagarde stating that the country is going through a transitional stage towards sustainable growth, and
FATF updates – renewing effort to tackle terrorism A special three-session meeting to discuss tackling terrorist financing was organised by the Financial Action Task Force in reaction to the atrocities that have taken place in the last few months. Whilst the agenda focused on broader ways to tackle terrorist financing, the Islamic State of Iraq
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
The UK, EU and the Financial Action Task force have promoted banks to adopt and implement a measured approach to de-risking clients that pose money laundering and financial crime risks. The central message has been for financial institutions to manage money laundering risks and to cease relationships with clients as a last resort. But, the
AMLD IV has placed emphasis on a risk-based approach to counter financial crime and terrorist financing. Few would argue against this approach. It is not only logical, but also the most practical way forward. The approach appears to be fairly straightforward, consisting of identification, assessment and management risk. However, recent news, analysis and conversation with
JWG analysis. On 9 November 2015, ESMA published its Q&A on the implementation of the current Market Abuse Directive (MAD). For those of you looking for some relief, this is a relatively short document, just 8 pages, and it consists of only two questions. Question one focuses on the disclosure of inside information related to
JWG analysis. Over the last 10 months, JWG’s CDMG has covered – in depth – the incoming Anti-Money Laundering Directive IV (AMLD IV). AMLD IV focuses on the risk profiles of clients and monitoring or reporting them accordingly. On 21 October, ESMA published a Joint Consultation Paper on simplified and enhanced due diligence, detailing the
JWG analysis. … at least, not much! This week is a significant one for compliance and legal professionals in the financial services industry. ESMA has finally released 1,500 pages of draft regulatory standards covering trading, market abuse and the settlement of securities. In the past few months, JWG has spent considerable time covering MiFID II,
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. With almost a 400% increase in the number of suspicious transaction reports received by the Financial Conduct Authority (FCA) since 2007, you may assume that the monitoring and reporting procedures put in place by firms have increased in quality. However, although this may be a logical conclusion to draw, a recent FCA newsletter
JWG analysis. At the 8th Customer Data Management Group (CDMG) meeting of 2015, on 18 August, over 20 members from 10 firms came together to discuss the new Market Abuse Regulation (MAR) and the potential challenges it holds. With less than 11 months until particular sections of MAR will apply to the financial services industry,
JWG analysis. Since the financial crisis, there has been an increased focus on tackling market abuse. As of March this year, the FCA had 49 cases market abuse cases open and, in 2014, 60+ market abuse cases were on their books. In terms of criminal convictions, three were secured for insider dealing and nine confiscation
JWG analysis. Since 2008, regulators have been plugging the gaps revealed by the global financial crisis and have just put another brick in the financial services wall – the 4th Money Laundering Directive. Last month, the much anticipated ‘IV’ was published in the official journal and will become the law of the land in 2
JWG analysis. We are less than 115 days from the point when the first phase of new energy trading reporting obligations kicks in across the EU. Amidst a recent industry outcry to develop more consistent data reporting standards, the requirements introduced by the Regulation on Energy Market Integrity and Transparency (REMIT) are yet another example
JWG analysis. JWG’s recent analysis report, the MiFID II KYC mountain, finds that financial institutions have a 12-item checklist to work through for their MiFID II KYC implementation due to the requirement for firms operating in the EU to acquire, document and agree much more information about their customer’s situation and their transacted business by
JWG analysis. Firms have plenty of planes in the air right now. The regulatory pressure on firms to ‘get KYC right’ in the form of new financial crime regulation, such as FATCA or AMLD IV, and huge fines means they will need to juggle these changes amidst an ongoing regulatory implementation effort. How you need
JWG analysis. Regulations like FATCA, EMIR and Dodd-Frank have asked us to collect more information on our customers than ever before – but now it’s clear that was just the start of the story. New regulation finds regulators even hungrier for information on the firm’s relationship with its customer, together with details of how information
JWG 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
JWG analysis. As we read the comments on our last article on the five tribes of regulatory reform, we were struck by the visceral reaction to the suggestion of sharing the agenda. “Hands-off, that’s my mortgage you’re messing with”, commented one lawyer. We wonder, can tribes achieve their overarching regulatory goals if they are NOT
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
The need for better counterparty information sits at the centre of most regulatory reform agendas. Unfortunately, this means the period from 2015 to 2017 brings with it massive new documentation, workflow and vendor change for the hundreds of fields maintained for every subaccount in capital markets. Do you know what is about to hit your marketing,
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. While most of us basked in the holiday spirit, the regulatory Grinches were hard at work. In the two-week period between 19 December and 2 January, regulatory bodies in the UK, EU and US alone published over 40 critical documents. JWG’s tracking revealed a broad range of subjects. CRD IV/CRR, BRRD, UCITS V,
JWG analysis. 60 attendees across the buy and sell-sides came together at Markit’s seminar in Stockholm last month to discuss today’s industry challenges. They concluded that a new focus on establishing a flexible banking operating model to meet both business and regulatory demands for data, processes and standards, is top on their wish list for 2015.
Huge fines and complex KYC rules are causing banks to ‘de-risk’ their client portfolios leading to many without access to banking. Now both consumers and politicians are unhappy. For years, the industry has struggled without real standards in the AML arena. So what happens next? SIBOS news was full of more KYC claims again this
JWG analysis. As the sun slips back into hibernation, schools reopen and autumn looms, regulators, lawyers, risk specialists, change managers and compliance professionals are returning to their desks. Here at JWG we have been busy tabulating the enormous level of movement in the regulatory space during the summer. For those of you lucky enough to
JWG analysis. This summer, regulatory pressure on financial services firms has ratcheted up to unprecedented levels. Many may have breathed a sigh of relief as Dodd-Frank rule-making slowed … but the respite was only fleeting. Since July, the industry has been bombarded with 39 new consultation papers (in the EU and UK alone) just as
By Sam Tyfield, Vedder Price. Recently, ESMA published two consultation papers (CPs) on MAR: 1. draft technical standards on MAR (CP1) and 2. draft technical advice on Commission delegated acts (CP2). The consultation period closes in October 2014. CP1 contains reference to insider trading, buy-backs and stabilisation, market soundings and other issues on which I
JWG analysis Europe has two key market abuse rule-sets being introduced in 2014/15 – The Regulation on Energy Market Integrity and Transparency (REMIT) and the Market Abuse Directive (MAD) and Regulation (MAR). This month, 4 consultations have been released; two from the Agency for the Cooperation of Energy Regulators (ACER) and two from the European
JWG analysis. The idea of KYC compliance has traditionally been associated with AML, PEP checks and international sanctions, however the new wave of regulations that is to begin rolling out in 2015 will place a whole new set of pressures on businesses to ‘know their clients’. Rachel Wolcott, writing for Accelus’ Compliance Complete, has highlighted
JWG analysis. The European Parliament recently published (here) the latest amended text of the proposed 4th Anti-Money Laundering Directive (AMLD IV), which includes measures to help simplify the way firms conduct KYC today, and adds weight to the KYC utility business model by requiring the industry to maintain accurate and timely data on beneficial ownership.
JWG analysis. According to the notice released on Thursday, the FCA has fined Standard Bank £7,640,400 for failings in its AML systems and controls relating to its treatment of corporate customers connected to politically exposed persons (PEPs). This notice is particularly relevant given that the FSA’s thematic reviews in 2010 found that “more than a
JWG analysis. The new political drive towards tax transparency is landing in money laundering legislation, and complicating an already complex landscape. G8 Leaders, as a result of the summit held in June last year, committed to publishing ‘action plans’ setting out the concrete steps they will take to combat tax evasion. It appears that those
This time next year, the market is going to be a very different place. No-one knows the complete, consolidated impact of regulation on the market, and many of the parts are still in motion, but the core structure is starting to take shape. In Europe, our research tells us that most institutions are opening 2014
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
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 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