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.
When the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd Frank) was passed back in July 2010, you could be forgiven for thinking that this was the regulation for global OTC swap reform. The US really were ‘first-to-market’ on this one, by a long margin, and we didn’t hear about OTC swap reform from other parts of the globe for the best part of another two years.
Skip forward to August 2012 when the European Market Infrastructure Regulation (EMIR) was passed – the European equivalent of Dodd Frank’s Title VII – and the penny started to drop that this was unfolding to be a far bigger initiative than many folks had first thought.
Now, if you had asked me earlier this year “was there life outside of Dodd Frank and EMIR”, I would have said yes and I could have told you that Canada and Australia had their own OTC swap reform programs, and that Hong Kong and Singapore were also looking to do something.
But that was about it.
It was only when I started digging deeper, that I realised how far off the mark I was. I mean, I only forgot Japan – the third biggest economy in the world – and I know they trade swaps out there for sure! Continue reading
When I first came across this term last year, I couldn’t even spell it, let alone tell you what it meant, but in today’s complex world of regulatory change and OTC swap reform it’s kind of important to understand.
So what’s it all about?
If you look it up in the dictionary, you get “the right or privilege of a state to exercise authority in certain circumstances beyond the limits of its territory”.
And that pretty much sums it up.
In the context of financial regulations, it means that if a country thinks that your firm or business should fall in-scope of a particular regulation, even though your firm or business may not be based in that country, then the regulatory scope to comply will be extended to include you.
The basis behind extraterritoriality is straightforward – if it wasn’t applied, the entire global financial services sector would simply relocate to a jurisdiction that didn’t bother with regulations. Continue reading
OK, second time this month I have had this “isn’t MiFIR part of EMIR” conversation, least of all the number of times I have had it this year, so let’s have a go at clearing this up.
It’s probably easier to understand how this all came about if you wind back the clock to April 2010 when CESR issued technical advice to the Commission recommending possible revisions to the Markets in Financial Instruments Directive (MiFID) that was implemented way back in November 2007.
This formed the basis of what was to be known as the ‘MiFID Review’.
The primary objective of the MiFID Review was to bring areas of the market that had escaped the MiFID net, such as broker crossing networks and dark pools, into scope, as well as update the regulation to capture market advancements in technology, such as automated trading and high frequency trading.
Now wind forward the clock, and in stumbles EMIR, which clearly had some overlap with what was trying to be achieved with the MiFID Review. Continue reading
Under the weight of regulatory complexity, clients have been looking at how the traditional approaches to implementing regulatory change have struggled to deliver in recent years.
In a previous blog here, I looked at a solution that addresses just this and introduces the idea of deploying a Regulatory Architect to manage Regulatory Architecture.
In a follow-up blog here, I looked at the Role of the Regulatory Architect and how Regulatory Architecture embeds intelligent process and structure into the change programme, enabling the strategy to realise efficiencies that result in a faster and cheaper delivery.
So what efficiencies do Regulatory Architecture bring to the table? Continue reading
In a previous blog here, I looked at why there is a business case for using Regulatory Architects to manage Regulatory Architecture.
If you have ever been involved in a regulatory change project, you will likely have experienced the many ‘pains’ that are encountered when trying to understand, let alone implement, complex regulations.
The role of the Regulatory Architect is to alleviate these pains by bridging the gap between the regulatory process and project delivery.
So what are some of the tools that the Regulatory Architect might use to ‘bridge the gap’ and enable greater implementation efficiencies? Continue reading