Regulation & Compliance special report

June 2012 - sponsored by: NICE Actimize, Omgeo, SIX Financial Information

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An Unenviable Position

I don't envy Wall Street technologists-these haven't exactly been boom years of late. The financial crisis ushered in an unprecedented wave of new regulations. As a result, already pared-down IT teams contemplating life with shrinking budgets have been forced to become more focused and efficient.

Some would say that this is for the best. In the Q&A on page nine, our group of industry experts takes a look at the competitive advantages that can be gained from this regulatory overhaul. Turmoil creates opportunity for those intelligent and efficient enough to capitalize on market confusion.

And confusion abounds. Several rules stemming from the Dodd-Frank Act are currently bogged down in litigation, while one-the proxy access rule-has already been shot down. There are numerous definitions pertaining to these new regulations that are yet to be finalized, resulting in regulators pushing back compliance dates on a number of major initiatives.

This is also an election year in the US and there's no guarantee that President Barack Obama will win a second term. However, even if he is victorious, he's likely to have to back off his drive to clean up Wall Street through regulation, and that might just mean the death of the Volcker Rule, which has already been delayed until July 2014.

I recently attended a conference in Houston where the keynote address was delivered by Dan Berkovitz, the Commodity Futures Trading Commission's (CFTC's) general counsel. Berkovitz used the word "hope" no fewer than a dozen times when speaking about meeting deadlines for initiatives such as the definition of a swap-a long-term sticking point for the industry-cross-border implementations of the Dodd-Frank Act, clearing requirements, and what the soon-to-be-introduced swap execution facilities (SEFs) are likely to look like. He also told attendees about several new rules the CFTC is "hoping" to unveil in the coming months. This means that even as regulators fight to finalize rules that were meant to come into effect by the end of 2012, there are still more to come.

An uncertain environment is a dangerous-if opportune-one. And with each answer given, it seems as though a new fight is created in a courtroom. No, I don't envy Wall Street's technologists-but rest assured, the survivors of this current challenge stand to gain a great deal of credibility and goodwill from their CEOs and CFOs...until the next wave of regulation comes along.

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