New Year's Resolutions for the Capital Markets: 2017 Edition

The most important things the industry needs to focus on for the coming year.


Everyone's making New Year's resolutions, so Dan has decided to make some suggestions for the capital markets.

The New Year is here, which means it's time for a little self-improvement. What better way to spend the dreary winter months than setting ridiculously high goals that you will likely give up on before Valentine's Day?

As was the case last year, I decided to identify a couple of areas the financial services industry needs to work on for 2017. (Note: These aren't trends I'm predicting for the New Year. I left that to Victor Anderson, Waters' EIC, who tackled that on a recent episode of the Waters Wavelength podcast.)

Instead, look at these as suggestions of things that need to be sorted out sooner rather than later. Kind of like those love handles and smoking habit you need to drop.


I'll kick things off with the dumpster fire that is the US Commodity Futures Trading Commission (CFTC), as it's been in the news most recently. In case you missed it, Timothy Massad, the chairman of the CFTC, announced his resignation effective Jan. 20.

For those of you keeping track at home, that means three of the five possible commissioner positions need to be filled. Now, far be it for me to speak ill of the government or remaining commissioners Sharon Bowen and J. Christopher Giancarlo, but I don't have much faith in a regulator operating with less than half its suggested staff.

Add in the fact that we have an incoming president with no political experience, and you start to see the importance of having the CFTC at full strength. Again, I'm never one to call for more regulations, but there is always a need for checks and balances, and I'm not sure how good of a job the CFTC can do of that when it's handicapped the way it is.


I've written more about the Consolidated Audit Trail (CAT) than I care to admit. However, the fact remains this is a massive project that will have a major impact on the entire industry. That's why it's so important for 2017 to be the year that we finally get this massive database up and running.

The US Securities and Exchange Commission's approval of the plan last fall was a huge step in the right direction, but we're not completely where we need to be. A plan processor still needs to be selected, which will be tasked with building the massive audit trail. There are also those who say the actual plan needs to be revised before it is put into effect.

There are hurdles to overcome, but it should be considered a failure on the part of everyone involved if at least a portion of the CAT isn't up and running by the end of the year.

Mifid II

We are officially less than a year away from the implementation of Markets in Financial Instruments Directive II (Mifid II). And while some folks can continue to pray for a delay, firms can no longer procrastinate when it comes to making the necessary implementations to be compliant.

My colleague John Brazier has already done a great job covering Mifid II's impending deadline, coincidentally writing a piece about it today, but the importance of firms having their ducks in a row can't be overstated. The industry can't suffer another delay when it comes to Mifid II.

The regulation has often been called Europe's version of the Dodd-Frank Act, and we've all seen how long that's taken the US to implement. More delays will only set the industry back further.


Distributed-ledger technologies (DLTs) had an interesting year in 2016. No technology came into the year hotter, as blockchain was seemingly all the rage at the end of 2015.

But throughout 2016 the hype seemed to slowly die down for blockchain, culminating in Goldman Sachs, Morgan Stanley and Santander all reportedly leaving R3, the largest consortium for the technology in the industry.

So how can blockchain have a bounce back year after a sophomore slump? Actual implementations.

It's not rocket science. In fact, I basically said the same thing in last year's New Year's resolutions' column. The industry is tired of pouring money into a technology that has yet to produce tangible results for them. If we see firms implementing DLTs in a real way, however small, I think the tide will start to turn back in favor of blockchain.

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