Common Traits Emerge in European Regulation

The financial services industry is under intense regulatory pressure, and market participants and vendors are trying to understand the scope of the changes that are coming—and that are already a reality.

Issues such as outsourcing, data governance and regulatory overlap were discussed by executives at the Paris and Copenhagen editions of the European Regulatory Roadshow. These were part of a series of roadshows hosted by Waters, Inside Market Data and Inside Reference Data, which will continue with events in Frankfurt on October 14 and in Zurich on October 27.

Executives in Denmark spoke of the commonalities emerging across regulations like the Markets in Financial Instruments Directive (MiFID II) and Solvency II, such as the relatively new concept of the legal entity identifier and many of the standardization initiatives emerging.

Nevertheless, they said, there is not enough overlap to make data management for compliance anything but a highly complex and costly undertaking. For example, firms need to be aware of all the taxonomies, so they can take advantage of any similarities, said Hubert Deroubaix, head of European Regulatory Product at Interactive Data.

With MiFID II coming up, firms are trying to understand how much data they need to store and whether or not they want to build in-house infrastructure for this, or have a hosted solution. Concerns around choosing the latter—data security and privacy, and cost—were expressed.

In Paris, the roadshow heard from Konstantinos Botopoulos, chairman of the market integrity standing committee at regulator the European Securities and Markets Authority, who outlined reference data challenges facing the regulator in terms of liquidity calculations for MiFID II.

For more information about the upcoming roadshows, visit the website at europeanregulationroadshow.com