If Deadlines Aren’t Fixed, They’re Guidelines

One of the more peculiar quirks of journalism that I came across in my early career was Deadline Fever. Normally genial, kind people would turn into snappy tyrants at around the same time each month, healthy people who I knew worked out and ate well would develop bags around their eyes, a sallow complexion, and they wouldn't be taking in anything other than coffee (black, ten sugars). The newsroom would be filled with a low, cynical muttering, rather than the general hum of conversation that it normally was. Phone calls would be answered with clipped tones, sometimes just last names, and would never last for longer than a few moments before being slammed down belligerently and followed by a murmured curse about time wasting, with a mutinous glance to the handset, just to check it was fully on the cradle.

The reason people become so stressed, in journalism at least, about deadlines is that they're inviolable. A deadline is a deadline is a deadline, goes the editor's mantra. If you don't hit it, your piece that you've sweated blood for gets spiked, and it's up to you to explain to your contacts why. In more extreme news environments, it kicks off a series of polite and restrained, but wholly unpleasant disciplinary meetings. Death by cup of tea. They're there as concrete walls in the sand, not just a mark that can be shifted, and your job is to hit them regardless of what else goes on.

Moving Goalposts
The fact that this just isn't the case for some is something I've always found remarkable, when covering regulation in the capital markets. Deadlines, it seems, are a fun thing, with various agencies around the world competing just to see who can miss them by the longest margin. The regulated themselves aren't much better, if the constant entreaties about looming regulatory milestones are anything to go by. Take the swap execution facility (SEF) rules, the targeted interviews given to select media outlets hinting that maybe, just maybe, October is too draconian. The off-the-record conversations that say, outside of a notepad and Dictaphone, that the targets are Going To Be Tough to hit, in that deliciously nuanced term of phrase so favored by spokespersons the world over. The financial services industry is, without competition, the most accomplished I've ever covered at building slow undercurrents of thoughts that eventually snowball into real issues.

For a while, it looked as if the US Commodity Futures Trading Commission (CFTC) was going to hold firm, even if it was taking an unreasonable amount of time to get temporary approval out, and the concrete wall was fast approaching. Now, Chairman Gensler seems open to the idea of targeted relief and assistance, as long as it's phrased correctly, if his comments in London last week were anything to go by.

I have some sympathy with the SEFs, who are dealing with moving goalposts. But the fact is that there has been a lot of time to get ready for this, and most managed to have a fair idea of what was going to be asked of them before finalization. Three months, too, is a long time, particularly if your business is dedicated to the goal of providing swap trading, or foreign exchange (FX) derivatives trading, or whatever else. Some have been really good at getting ready - Bloomberg, Tradeweb, TeraExchange and more spring to mind. Others, not so much. But outside of SEF regulation, the lackadaisical attitude from regulators is troubling.

For a while, it looked as if the US Commodity Futures Trading Commission (CFTC) was going to hold firm, even if it was taking an unreasonable amount of time to get temporary approval out, and the concrete wall was fast approaching. Now, Chairman Gensler seems open to the idea of targeted relief and assistance, as long as it's phrased correctly, if his comments in London last week were anything to go by.

Dodd-Frank, and other macro regulation is getting on, now, and the missed deadlines provide more time for the rules to become problematic and out of date, given the natural evolution of markets. Regulators, and the industry, should recognize that deadlines are sacrosanct, except in extreme circumstances. Otherwise they're just guidelines, and that's no way to operate a financial system.