New York-based RIMES Technologies is a regular name in the annual BST Awards, having dominated the best data provider category for more than a decade. But it’s a fresh face in these awards, thanks to its RIMES RegFocus BMR Control (BMRC) offering, initially rolled out to help asset managers comply with the EU’s Benchmarks Regulation (BMR), introduced in January 2018. According to the European Securities and Markets Authority, responsible for enforcing the regulation, BMR is designed to ensure the “accuracy and integrity of benchmarks.” And while it might not set pulses racing, it is nonetheless important for both sides of the industry, especially firms based in Europe or those servicing European clients.
BMRC is a cloud-based inventory management system designed to help firms understand the various indices and benchmarks they use, generating alerts when they are at risk of non-compliance. Crucially, it helps them understand whether they are benchmark administrators, contributors or users, and if so, which benchmarks are involved. “The uptake has been unsurprisingly equal on both sides [of the industry],” says Alessandro Ferrari, RIMES’ chief marketing officer. “Although our initial expectation and marketing focus was on the buy side, with RegFocus BMR we now have as many customers on the sell side.”
Given that BMR is an EU-focused regulation, one might assume that firms based outside the Eurozone are not touched by its tenets, and therefore have little interest in its regulatory impact. Not so, according to Ferrari: “BMR could, in theory, apply to all asset managers, owners or servicers, depending on where they do business,” he says. “If a non-Eurozone firm operates within the EU through a branch or subsidiary, its EU activity will be subject to BMR. Equally, they will be subject to the regulation if they administer benchmarks used by regulated entities within the EU.”
Regulatory compliance is a complex area for firms to navigate, especially when it comes to establishing what exactly they are required to comply with and what that might mean practically. According to Ferrari, the sell side faces arguably more acute challenges than the buy side in terms of identifying its use of benchmarks under BMR. “Whereas asset managers probably have a clear idea of whether they are measuring the performance of a fund by using a published index, it may be more difficult for banks to identify all activities across a wider range of business units that involve issuance of financial instruments that reference a benchmark or the use of benchmarks to determine the amounts payable in financial instruments or other financial contracts they are a party to,” he says.
By winning this category, RIMES joins OpenDoor Securities (2018), IHS Markit (2017), AcadiaSoft (2016) and Symphony (2015) in the winners’ circle.
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