Compliance & Regulation - Articles and news items
Blog / 30 January 2013 / Matt Clay, Baringa Partners
In many ways 2012 was a year that never quite fulfilled its potential for change. Neither the much anticipated implosion of the Eurozone, nor the raft of regulatory initiatives set for completion played out in quite the way that the industry may have expected. (more…)
Legislation, News, Treasury news / 7 November 2012 / Greenwich Associates
New regulations are leaving European institutions with little room to maneuver when it comes to finding ways to improve portfolio returns in a challenging investment market. (more…)
News, Technology news / 5 November 2012 / Ovum
A combination of a depressed world economy and tougher regulation will make the financial markets rally to IT in order to underpin more risk-averse business strategies, according to a new report from Ovum. (more…)
September 2012 / 11 September 2012 / Simon Watkins, Columnist, FX-MM
Pervasive public paranoia about ongoing credit risk issues, spectacular trading losses, and tawdry financial scandals sparked the mandate from the 2009 G20 meeting in Pittsburgh that was broadly aimed at enhancing trade transparency and central clearing for the FX market, and other major asset classes. Now, with the end-2012 deadline for the implementation of this mandate fastapproaching, the Herculean task of putting this mandate into practice is complicated further by the various geographic jurisdictions involved, most notably between the U.S. and Europe. FX-MM’s Simon Watkins looks at the issues.
Capital and margin requirements set to increase
For the global markets, the overall combined impact of these new regimes, such as Basel III, Dodd-Frank and MiFID II, will be the greater unencumbered capital reserves required against trading and banking books, combined with full collateral and clearing margin requirements for trading exposures, and tighter regulation. Inside the US’ Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 the Volcker Rule seeks to prohibit a bank (or institution that owns a bank) from proprietary trading, and from owning or investing in a hedge fund or private equity fund, and limiting the liabilities that the largest banks can hold, highlights Alex McDonald, CEO of the Wholesale Markets Brokers’ Association, in London. (more…)
Legislation, News / 5 July 2012 / Wolters Kluwer Financial Services
Wolters Kluwer Financial Services announced today that it has extended its ARC Logics for Financial Services suite with the launch of its new Regulatory Change Management solution which will enable U.K. financial institutions to keep up-to-date with regulatory changes, understand how the changes affect their business, and how policies and procedures should change accordingly. (more…)
News, Treasury news / 2 July 2012 / Wolters Kluwer Financial Services
Wolters Kluwer Financial Services announced today that the Bank of Taiwan has selected its FRSGlobal regulatory reporting solution to help ensure regulatory reporting compliance in its recently opened Mainland China branch. (more…)
Legislation, News / 7 June 2012 /
Compliance professionals around the world have reported major gaps in their readiness for the forthcoming US Foreign Account Tax Compliance Act (FATCA), according to a new survey by Thomson Reuters. While most firms appear to be aware of the decisions that need to be taken around FATCA, minimal regulatory guidance, lack of budgetary allocation and partial board awareness threaten to stretch already saturated risk and compliance functions in the financial services sector. (more…)
February 2012 / 3 February 2012 / Mike Zadoroznyj, Vice President, Treasury and Regulation Compliance, Triple Point Technology
With the industry facing an anticipated avalanche of regulatory changes, Mike Zadoroznyj, Vice President, Treasury and Regulatory Compliance, Triple Point Technology, takes a look at what companies need to be doing right now in order to prepare for the changes.
At more than 2,000 pages in length, the Dodd-Frank Act is the US government’s extensive and wide-ranging response to the financial crisis. From debit card transaction fees to exchange-traded derivatives, there is almost no aspect of financial activity that has escaped its attentions.
Dodd-Frank was signed into law well over a year ago – in July 2010 – but the US financial and trading landscape is still being defined. The finer points are still being negotiated, clarified by lawyers, and challenged by Wall Street players. Becoming compliant in this environment will be no easy task. (more…)
December 2011 / January 2012 / 5 January 2012 / Wayne Pestone, Chief Regulatory Officer, FXall
Wayne Pestone, Chief Regulatory Officer, FXall, provides his thoughts on the regulatory developments that we have seen in 2011 and on some of the major regulatory challenges which lie ahead.
In 2008, the G20 emphasised principles to restore global growth and improve the safety of the world’s financial systems. These principles include promoting integrity in the financial markets, strengthening transparency and enhancing sound regulation. In 2012, we are heading towards the deadline for the implementation of the G20’s action plan that is intended to achieve these principles.
Despite numerous delays and attention being diverted to pressing issues such as the Eurozone crisis and the U.S. debt downgrade, momentum towards regulatory reform of the financial markets infrastructure did grow in 2011. Namely, regulatory proposals for EMIR and MiFID II/MiFIR were developed by the European Commission and, with respect to the Dodd-Frank Act, numerous rules were proposed by the CFTC and the SEC. While market participants now have a clearer understanding of the intended final rules, there are still many unsettled issues, and questions remain over how, when and what effects the rules will have on the financial markets. (more…)
December 2011 / January 2012 / 5 January 2012 / Dr. Anthony W. Kirby of Ernst & Young
The sheer volume of anticipated regulatory developments in the financial sector over the next five years is daunting, not least because of the potential for regulators on both sides of the Atlantic to arrive at different solutions for dealing with the same problems. Dr. Anthony W. Kirby of Ernst & Young compares and contrasts the EU and US approaches to regulatory development.
The global securities industry is in the midst of a tsunami of change. The drivers include macro-/micro-economics, G20/political developments, and the sunrise of new technologies such as cloud computing. Given the turbulence in some Euro-zone countries and in the commodities markets in 2011, it is little surprise that governments, central banks and regulators are on constant alert, and this could be a semi-permanent feature of the investment landscape in the near-term. Regulation has a gross impact across the business and operating models of players on the buy- and sellsides, as well as asset servicers and market infrastructure providers.
Regulation impacts the supporting data structures, boosts the need for quality management information, increases the need for timely reporting and disclosure, forces changes in systems and controls, challenges firms to amend policies and procedures, challenges firms to review their appetites for risk and above all, encourages firms to ensure that their governance arrangements are fit for purpose (‘tone from the top’). (more…)
November 2011 / 9 November 2011 /
In April 2008 the Swiss authorities introduced new regulations governing the activities of forex dealers operating in the country. Sebastien Micotti and Gianluca Flammia of the Swiss banking group, Dukascopy, take a look at the impact of these regulations.
Over the last three years regulatory oversight in most parts of the world, not to mention the global financial melt – down, has changed the landscape of what it takes to be a competitive forex broker/dealer (referred to hereinafter as “forex dealers”). Indeed, the forex dealer market is consolidating in regulated countries such as the US, Switzerland, Japan and many others.
In Switzerland, the authorities have not examined whether or not forex trading shall be deemed trading on a financial product or not. However, the approach taken by the Swiss regulator and government has drastically strengthened the regulatory framework for all forex dealers located in Switzerland since 2008. (more…)
November 2011 / 9 November 2011 / Frances Maguire, Columnist, FX-MM
In the wake of the latest high profile unauthorised trading case, which involved a $2.3 billion trading loss at UBS, Frances Maguire asks what can be done to prevent rogue trading, or at least limit the scale of the losses.
Once again the banking industry has stopped to ask itself if the measures in place are strong enough and whether a bank can ever stop rogue trading. Also, how can rogue traders be identified early on and weeded out, and if all else fails what damage limitation techniques can banks employ and finally, whether measures to prevent rogue trading be mandatory. While there is no specific regulation that states that banks must protect themselves against rogue trading, it is obviously taken as a given that they should try to do so. This is well covered in the liquidity risk requirements in place – banks should know their cash and positions at least at the close of business, if not intra-day.
What has come out of the UBS case is that there were a number of faked forward-settling transactions, which covered genuine transactions to make it look as though the trader had very residual risk from his transactions, thus hiding the true size of his positions. (more…)
October 2011 / 11 October 2011 / Steve Grob, Director of Group Strategy, Fidessa
Market fragmentation and venue competition is an almost irresistible global trend, spurred initially in most regions by regulation. As Australia looks set to follow suit with the ASIC’s Market Integrity Rules, Steve Grob, Director of Group Strategy at Fidessa, looks at the different regulations across the globe and explores the possible effects in Australia.
With ASX’s launch of its new smart order routing system, ASX Best, the arrival of its VolumeMatch and PureMatch venues, and the forth – coming go-live of Chi-X in Australia, it is clear that the trading landscape there is going through a period of rapid transformation and re-alignment. If, as seems likely, Australia follows a similar pattern to that seen in European and North American markets, then liquidity fragmentation and other venues, both dark and lit, will follow. (more…)
September 2011 / 13 September 2011 / Matt Tuck, Managing Director, Global Head of Financial Institutions (FI), Barclays Corporate
Matt Tuck joined Barclays Corporate (the corporate banking arm of Barclays Bank PLC) in January as Managing Director, Global Head of Financial Institutions (FI). He talks to Frances Maguire about his new role in implementing the next phase of growth in the bank’s FI business and what he believes are some of the main issues facing financial institutions today.
Financial institutions continue to operate against a backdrop of substantial change. Indeed the events of the past two months have done nothing but reinforce this notion. As recently as August, we saw the financial markets once again rocked by a renewed period of turbulence and uncertainty feeding from the ongoing fiscal and sovereign debt challenges in the Eurozone; the difficulties surrounding the raising of the US debt ceiling; and a stream of weak economic data which has resurfaced fears of a second global slowdown. Against this ever-changing landscape, Matt Tuck, Managing Director, Global Head of Financial Institutions (FI), at Barclays Corporate believes that institutions need to stay close to their clients and continue to focus on understanding the global interdependencies affecting their business and that of their clients, alongside developing a clear understanding of the local markets in which they operate, to ensure they adapt their strategies accordingly. (more…)
August 2011 / 9 August 2011 / Jess Haberman, Fidessa
Just a few days ago, on July 14th, SEC Rule 15c3-5, the market access rule, became effective. Fortunately, the days since have resulted in little fanfare and few problems.
As was widely anticipated, certain aspects of the rule were delayed. Specifically, the SEC agreed to phase in all aspects of the rule as they apply to fixed income securities and, perhaps more wide-reaching, postponed the implementation of controls to ensure orders sent through brokers’ systems do not exceed pre-set credit or capital thresholds.
Broker-dealers will still have to determine appropriate credit thresholds for all counterparties for which they provide market access (and for themselves), though they will now have several more months to do so. Given the number of customers they may have and the limited guidance to date regarding the factors to consider when establishing these thresholds, it is perhaps no surprise that a delay was granted. (more…)