For any of you veteran Dodd Frankers out there – drum roll! – the SEC have just published their Final Rules for the ‘Cross-Border Application of Certain Security-Based Swap Requirements’ in the Federal Register.
Five years or so ago everyone would have been all over this but I wouldn’t be surprised now if folks have completely forgotten this was ever coming and that one day they might need to register to be a Security-Based Swap Dealer and so let me explain.
Wind back the clock to 2010 when the Dodd Frank Act was signed into legislation (yes, it really was that long ago) and you may recall that Dodd Frank divides regulatory authority of swap reform between the CFTC and the SEC – unhelpfully, there is no one-stop-shop like there largely is with ESMA and EMIR. Continue reading
When I showed this blog to a chum of mine at another bank, he said my blogging’s now becoming like a London bus – you get nothing for two years and then two come along at the same time. He’s got a point! 🙂
Apparently it’s called ‘bus bunching’…
Anyway, I want to look at regulatory trade and transaction reporting and given we’ve just gone live with five brand new reporting regimes courtesy of MiFID 2, as well as the complete rewrite of EMIR trade reporting back in November last year, I really should have tried harder with my timing on this one because the ideas behind this blog were originally kicked around back in 2014 when I was at Barclays and I worked on the “what does good look like” for EMIR trade reporting first time round. Still, like a bus, better late than never and you’ll still be in good time to apply any findings ahead of SFTR and the CFTC’s rewrite of their Part 45! Continue reading
The valkyrie Brünnhilde…
It’s been a while since I last put pen to paper. Call it writer’s block or something or maybe I’m just knackered from the x-thousand pages of financial regulations that I’ve had to process in the last two years, but either way, I wanted to give you an update on things, particularly as you’re all probably breathing a sigh of relief now that MiFID 2 is out of the way and wondering if you can all get back to a normal life?
Afraid not, that is, if you settle securities, or you’re generous enough to lend them out because there’s more regulation in the pipeline. Continue reading
When I first delved into EMIR back in 2012, the importance of ‘equivalence’ didn’t even cross my mind, least of all how the global bit of all this OTC swap reform was going to play out.
Given the complexity of what had just landed in your lap, why would it?!
A year or so down the road, being older and wiser, the penny dropped about the global bit and I wrote about it in a blog in October 2013 that considered the true scale of global OTC swap reform.
“Haven’t we finished EMIR?”
“I mean, 2012, that stuff is 3 years old right?”
And so my meaningful conversation in the pub went on, but the truth is, in terms of what’s in place and actually up and running, we’ve really only just scratched the surface and I felt compelled to explain why.
As a Consultant, your high-level analysis doesn’t get much higher than a Road Map (other than your pub analysis of course! 🙂 ) but for EMIR and European OTC derivative reform, we can go one step better and wind back the clock to the September 2009 G20 Summit in Pittsburgh, where one short statement changed the World forever for OTC derivatives:
“All standardized OTC derivative contracts should be traded on exchanges or electronic trading platforms, where appropriate, and cleared through central counterparties by end-2012 at the latest. OTC derivative contracts should be reported to trade repositories. Non-centrally cleared contracts should be subject to higher capital requirements.” Continue reading
A contents page.
How hard can it be!
Not exactly rocket science…
When I see folks pick up MiFID II or MiFIR for the first time (or any regulation come to think of that!) their eyes glaze over.
When they flick through the first dozen or so pages you can feel the pain of not knowing what the heck these 100’s of pages of regulations are all about and how to make sense of it all. And to be honest, the EU seems to go out of its way to further this frustration by not providing a contents page. Maybe they feel we don’t need one. Continue reading
Truth be told, I’ve got a soft spot for MiFID – the Markets in Financial Instruments Directive that was introduced back in November 2007 to shake up Europe’s equity markets and create a common set of rules for a single market.
I cut my teeth on the regulation when I tore the thing apart to understand the impact that the introduction of MTFs would have on buy-side trading desks. I didn’t care too much about the regulation at the time per se because all I was focused on was designing trade execution algorithms, but it sure did give me an introduction into how regulations were coming of age!
Six years down the road and the same regulation is still paying my way :-), this time courtesy of the MiFID Review. The folks that are responsible for writing this stuff typically stick a date in the diary for ‘T+5 years’ to rectify things that didn’t quite play out first time round.
To be clear, the MiFID Review is a complex piece of legislation. It is made up of MiFID II, a huge overhaul of the original regulation, because technologically a lot has changed, and MiFIR, an amendment to EMIR, because the launch of the MiFID Review collided head on with the European response to global OTC swap reform. Continue reading
In the first part of this three part blog, I looked at the concept of ‘enterprise regulatory change’ and considered whether regulatory change initiatives, at the enterprise level, are even achievable, whilst in the second part, I looked at the implementation models for enterprise regulatory change and what this means at the programme level. In this final part, I want to look at the practical realities of implementing regulatory change and what this might mean to an enterprise-wide initiative.
It’s kind of clear that the implementation-model-piece-of-the-jigsaw is the “in theory” part of the decision making process – great on paper, but not necessarily so great in practice – and that when you have to drill down into the level of thinking required to factor in the shape and size of the organisation, the decision making process really becomes a two dimensional one. Continue reading
In the first part of this three part blog, I looked at the concept of ‘enterprise regulatory change’ and considered whether regulatory change initiatives, at the enterprise level, are even achievable.
In reality, the answer to this is “it depends”.
When I first thought about enterprise regulatory change, I thought that the key to achieving a successful enterprise-wide initiative would purely be a function of the sophistication of the implementation model.
But when you look at how it all comes together in practice, it’s clearly not so straightforward.
In practice, there are going to be many other different factors that determine how a regulation can be implemented across one business area versus how it can be implemented across another. Continue reading
The financial crisis and the ensuing tsunami of regulatory change has forced many participants across the financial services sector to take a radically different approach as to how they manage their core businesses.
A tougher regulatory regime against bank capital structures has significantly dented profitability across many, once lucrative, business lines whilst the knock on effect through the value chain has ensured that the buy-side are not immune to these problems either.
Consequently, firms are being forced to take a holistic view as to how they manage their core businesses and the term ‘enterprise‘ is becoming an important word for banks and fund managers alike as they deploy strategic measures to reduce costs.