Taking the Pulse of Reporting and Capital Adequacy Compliance
Commonalities in European rulemaking still need to be translated into industry systems
Financial services industry market participants are trying to find enough overlap between major new regulations such as MiFID II/MiFIR, BCBS 239 and Solvency II to be able to achieve more with a single data management effort.
This dilemma has emerged during discussions at our European Regulatory Roadshow series, which started recently with Paris and Copenhagen events. The series, hosted by Waters, Inside Market Data and Inside Reference Data, will continue with events in Frankfurt on October 14, Zurich on October 27 and Amsterdam on November 26.
Interactive Data regulatory product executive Hubert Deroubaix told Copenhagen attendees that the lack of overlap is making data management for regulatory compliance a complex and costly proposition.
Although MiFID (Markets in Financial Instruments Directive) II and its associated MiFIR regulation, BCBS 239, Solvency II and the US Foreign Account Tax Compliance Act, which also can figure into the European regulatory mix, all have their distinct provisions and idiosyncrasies, in the end, all of these sets of rules center on two things: reporting and capital adequacy.
BCBS 239 mandates risk data aggregation principles and sets out annual risk data stress tests beginning next year. Similarly, Solvency II, the European Union directive that takes effect on January 1, sets reporting requirements to demonstrate capital adequacy in the insurance segment of the financial services industry. MiFID II/MiFIR are concerned just with reporting overall, without delving into capital adequacy, tax withholding compliance or anything specific about the content of what is being reported and how that may meet desired standards for the financial industry.
It may have been understandable in 2013 or 2014 that data aggregation, governance and processing plans and systems were not in place or up to the demands to come from BCBS 239, as shown in survey results released earlier this year.
But months have passed since those results, and now there are just a few short months before BCBS 239 and Solvency II provisions are going to be the law. It will be interesting to see in the upcoming European Regulatory Roadshow events happening through the end of 2015, whether the industry's pulse—in terms of the functioning of data aggregation governance, architecture and processes for compliance with reporting and capital adequacy rules—has quickened.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
DSB says industry is ready to meet UPI mandate ahead of deadline
The Unique Product Identifier will be required for certain OTC derivatives in the EU at the end of April, following US adoption in January.
‘Very careful thought’: T+1 will introduce costs, complexities for ETF traders
When the US moves to T+1 at the end of May 2024, firms trading ETFs will need to automate their workflows as much as possible to avoid "settlement misalignment" and additional costs.
Court case probes open-source licenses as movement stands at crossroads
The Software Freedom Conservancy’s lawsuit against TV-maker Vizio begins trial in California, raising questions about open-source licenses and the risks posed by adhering to them.
Waters Wavelength Podcast: Countdown to T+1
DTCC’s Val Wotton joins the podcast this week to discuss the impending move to T+1 in the US.
Consolidated tape hopefuls gear up for uncertain tender process
The bond tapes in the UK and EU are on track to be authorized in 2025. Prospective bidders for the role of provider must choose where to focus their efforts in anticipation of more regulatory clarity on the tender process.
Fighting FAIRR: Inside the bill aiming to keep AI and algos honest
The Financial Artificial Intelligence Risk Reduction Act seeks to fix a market abuse loophole by declaring that AI algorithms do not have brains.
Waters Wrap: The rise of AI washing… and regulation washing?
The SEC recently levied fines against two investment advisors over “AI washing”. Anthony takes issue with the announcement.
Prepare now for the inevitable: T+1 isn’t just a US challenge
The DTCC’s Val Wotton believes that firms around the globe should view North America’s move to T+1 as an opportunity—because it’s inevitable.
Most read
- Chris Edmonds takes the reins at ICE Fixed Income and Data Services
- Deutsche Börse democratizes data with Marketplace offering
- Sell-Side Technology Awards 2024: All the winners