Regulation & Standards special report

September 2012 - sponsored by: CUSIP Global Services, SIX Financial Information

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Executive Action

In Inside Reference Data's September 2011 Regulation & Standards report, the means for implementing the legal entity identifier (LEI) dominated the virtual roundtable discussion. This year, the overriding theme financial industry data executives spoke about in the roundtable is that firms are more aggressively taking steps to address regulatory compliance concerning data management.

As Rick Aiere of Credit Suisse says: "The better prepared firms...are in execution mode, focusing on delivery to ensure the compliance action meets the timelines and the information is proactively managed." He goes on to say resources are being allocated and units are being formed to work on compliance. Suresh Iyer of Nomura sees compliance work being "prioritized," adding that this means data management is a function that is getting more attention as a result.

Asked how the costs of regulatory compliance compare to the return on investment in compliance systems, the roundtable participants say spending on compliance systems is worth it, demonstrating a sentiment that is becoming more widespread in the industry. "In the long run," says Aiere, "it guards against risks due to reputational damage." And Iyer says the spending is "long overdue."

While roundtable participants were still raising LEI as the biggest compliance challenge, they also see the Foreign Account Tax Compliance Act as a concern now. Solvency II and Basel III are also reaping attention, they say. This is consistent with what Inside Reference Data has seen in its coverage so far this year, as well, and is also evident in the sampling of recent stories on pages 6-7, which show Solvency II rules being clarified and set, advances on messaging format standardization, and a call to the industry to familiarize itself with ontologies.

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