LATEST ARTICLES | COMPLIANCE

ACA: 97% of Firms are Reporting Incorrectly Under MiFIR/EMIR

97% of reports under MIFIR/EMIR contain inaccuraciesOn average each report has 30 separate error typesDespite this, 87% of firms are confident in the quality of their reportsOn the anniversary of EMIR REFIT, data quality is still poor New research from governance, risk, and compliance (GRC) advisor ACA Group into the accuracy of transaction reporting under MIFIR/EMIR has shown that 97% of firms reviewed are currently reporting incorrectly. The research shows that most firms (87%) are confident in the quality of the reports that they submit to regulators via Approved Reporting Mechanisms and Trade Repositories under MiFIR and/or EMIR, with many assuming that no direct contact from the FCA means that all must be well.However...

Biden’s Regulatory Policies: Three of the Most Impacted Areas

Since assuming office, President Biden has made combatting Covid-19 and bolstering the US economy the immediate priorities for his administration. Behind the scenes, however, are looming regulatory changes that could unwind much of the deregulation that occurred in the Trump era. Three areas -- the environment, healthcare and Big Tech – are likely to be among the most affected.At the outset, it should be acknowledged that the impact of regulations on the overall economy is inherently difficult to quantify. One reason is federal agencies are only required to conduct cost-benefit analyses on rules deemed "economically significant". They are defined as having an annual effect on the economy of at least $100 million (£72 million). 

Want to be AML Whistleblower? Not So Fast

You work in the anti-money laundering department of a major bank or brokerage and overhear a conversation about how suspicious activity reports are not being filed on a particular client; how the transaction monitoring system is not working properly; or how wire transfers are being made to a country or individual on a US sanctions list.Do you: a) tell your supervisor about your concerns of a potential regulatory violation and fine; b) forget what you heard; or c) call a regulatory agency and hope to win an award? Until now, choices a and b were generally the only practical ones available. 

EC gives green light to Euroclear UK & Ireland for temporary equivalence extension

The European Commission has granted Euroclear UK & Ireland (EUI) the ability to continue to offer issuer central security depository (CSD) services after the Brexit transition period ends on 31 December 2020.EUI will be able to continue settling Irish-domiclied funds and securities up until the end of the new extension period of 30 June 2021.This comes as the EC has decided to adopt an implementing act determining the legal and supervisory requirements for UK CSDs as equivalent to those in the EU.

CLS rolls out netting calculation service to Finastra clients under partnership

Foreign exchange settlement specialist CLS will provide its netting calculation platform to clients of global FinTech provider Finastra under a new partnership. Finastra’s clients, including over 800 corporate and buy-side firms, will gain access to the CLSNet platform following an integration between CLS and the Finastra Fusion confirmation matching service.

Banks to increase spend on post-trade infrastructure after failures in market volatility

Major investment banks will increase investment in post-trade infrastructure after reporting failures with back-office processes during the market volatility earlier this year.According to a recent survey by Acuti, 95% of tier one and tier two banks are planning to invest more than $1 million in post-trade infrastructure over the next three years, with 45% hoping to invest more than $5 million. 

Is analytics the missing piece in a complex settlement jigsaw?

At a time when the costs of doing business are skyrocketing, is it sustainable for banks to persevere with the current approach to trade settlement failure?While there will always be trades that fail, the tolerance levels of banking boardroom execs must be at breaking point right now if the latest Esma Trends Risks and Vulnerabilities (TVR) report is anything to go by. The study shows a dramatic surge in the level of settlement fails during the second half of March, with fails climbing to around 14 percent for equities and close to six percent for government and corporate bonds.  

Covid-19 spurs fintech regulation innovation – study

Covid-19 has led to a strong increase in the use of fintech products and services, prompting central banks and other financial authorities to step up their own regulatory innovation efforts, according to a report from the World Bank and the Cambridge Centre For Alternative Finance (CCAF).The study, which gathered responses from 118 central banks and other financial regulatory authorities in 114 jurisdictions worldwide, shows strong fintech take-up since the outbreak of the pandemic.

EU stocks traded on UK venue in GBP not subject to share trading rules...

European banks and buy-side firms will be able to trade certain EU-listed stocks on UK-based platforms post-Brexit, in a move that will ease some concern for market participants.Under revised plans for the share trading obligation (STO), stocks with a European Economic Area (EEA) ISIN will not be subject to the share trading rules and can trade on UK trading venues post-Brexit if traded in pound sterling.

India preps fintech regulatory sandbox for smart city hub

Indian regulators have set out the framework for a fintech regulatory sandbox designed to help firms experiment in a live environment.The sandbox will let established players and startups in the banking, capital markets and insurance sectors test products and services in a live environment with a limited number of real customers for a set time frame.

Demystifying the CAT: Why Compliance is More Than a Tick Box Exercise

Phil Flood, Chief Commercial Officer at Inforalgo, a Gresham Technologies company, demystifies the Consolidated Audit Trail (CAT) as we approach the first Interfirm Linkage deadline on 26 Oct.

CFTC tightens crypto rules for Futures Commission Merchants

The Division of Swap Dealer and Intermediary Oversight (DSIO) of the Commodity Futures Trading Commission today issued an advisory to futures commission merchants (FCMs) regarding the holding of virtual currency in segregated accounts. 

BoE and CFTC reinforce cross-border supervision of derivatives clearing in new agreement

Regulators for the UK and US derivatives markets have signed a new cross-border supervisory agreement for clearing houses operating in both countries. The Bank of England (BoE) and the US Commodity Futures Trading Commission (CFTC) announced the signing of a new memorandum of understanding (MOU) where they have established a cooperation framework for overseeing international clearing houses.  

Cum-ex: legal opinions are no sure defence, warn tax experts

Individuals involved in cum-ex prior to 2012 will not be spared from prosecution by producing legal opinions from the time, warn Rahman Ravelli lawyers.Up to 600 names are understood to be on a list in the German prosecutor’s office, representing the full gamut of individuals from all role functions and levels of seniority related to what is now perceived to be a wide-spread conspiracy to cheat European tax authorities by double-claiming on dividends. 

Don’t Just Reopen Trading Floors — Reimagine Them

Dispersed trading floors are here to stay. While sell-side traders will eventually make it back to the trading floor, banks are accepting that they will need to maintain partially-remote trading floors for the foreseeable future. Though triggered by the COVID-19 pandemic, this is just another step along the path away from trading pits and towards electronic communication and automation. Trading pits gave way to electronic trading, physically separating traders from different firms from each other. This further progressed within the firm as trading floors grew larger and global, leveraging technology to allow trading and sales to sit farther apart – sometimes in different offices. Although the driving cause today is different, traders, sales, support and operations staff within the same firm are forced to physically separate. Technology is filling the space in between. 

ISLA forms three new “broader” steering groups

The International Securities Lending Association (ISLA) has formed three new steering groups to address the regulatory, digital and associated market practice changes the industry is experiencing through the recent pandemic.ISLA runs a variety of working groups for its members, covering all aspects of advocacy, tax, legal, regulation and best practice in order to allow members to discuss challenges, debate issues, conceive ideas and seek solutions. 

Big banks give backing to Singapore Green Finance Centre

The Monetary Authority of Singapore and nine international banks have leant their weight to the establishment of a research institute dedicated to green finance research and talent development.The Singapore Green Finance Centre, run by Imperial College Business School and the Lee Kong Chian School of Business at Singapore Management University (SMU), will pursue research to help develop strategies for policy makers and financial institutions to support Asia’s transition to a low carbon future.

Bank of Japan preps CBDC experiments

The Bank of Japan will begin central bank digital currency (CBDC) experiments early next year but says it still does not yet have any plans to issue its own digital yen.Central banks around the world have been grappling for years with the pros and cons of creating their own digital currencies.

HSBC appointed securities services provider for HK ESG ETF

HSBC has been appointed as the as the full securities service provider by Haitong International Asset Management (HK) Limited for Haitong MSCI China A ESG ETF, the first broad-based environmental, social and governance exchange-traded fund listed on Hong Kong Stock Exchange. 

FSB: increase in suptech and regtech

The Financial Stability Board (FSB) has reported an increase in the use of regulatory technology (regtech) to help institutions meet their regulatory requirements and supervisory technology (suptech) to improve firm’s supervisory capabilities.In a report by the FSB, it explained that opportunities offered by both suptech and regtech have been created by a combination of factors that have come to the fore in recent years. 

UK’s FCA concludes first SSR enforcement against HK asset manager

The UK’s Financial Conduct Authority (FCA) has taken its first-ever enforcement action for a breach of the Short Selling Regulation (SSR).The market regulator has fined Hong Kong-based asset management firm Asia Research and Capital Management (ARCM), for failing to disclose its massive net short position in Premier Oil, a UK oil company, which it opened in February 2017 and built to 16.85 percent of issued share capital by July 2019. 

Retooling the NMS/SIP Market Data Universe

The SEC’s initiative to revamp the National Market System (NMS) data collection and distribution framework is both welcome and overdue (see SEC press release 2020-34). The time has come for firm action, to bring market data collection, distribution and pricing up to speed with today’s technology and practices on both Wall Street and Main Street. 

UK’s FCA concludes first SSR enforcement against Premier Oil short seller

The UK’s Financial Conduct Authority (FCA) has taken its first-ever enforcement action for a breach of the Short Selling Regulation (SSR).The market regulator has fined Hong Kong-based asset management firm Asia Research and Capital Management (ARCM), for failing to disclose its massive net short position in Premier Oil, a UK oil company, which it opened in February 2017 and built to 16.85 percent of issued share capital by July 2019. 

CFTC releases no-action letters offering further relief for clearing organisations during Libor transition

The Commodity Futures Trading Commission (CFTC) has published two additional no-action letters offering relief to derivatives clearing organisations (DCOs) transitioning to the secured overnight financing rate (SOFR).The no-action letters will offer swap transaction and pricing data reporting relief to DCOs that will help transition certain cleared swaps from discounting using the effective federal funds rate (EFFR) to the SOFR.

SFTR: Buy side start reporting

Buy-side members must begin reporting under the EU's Securities Financing Transactions Regulation (SFTR) from today as part of the third phase of implementation.SFTR reporting obligations now apply to investment funds, pension funds and (re-)insurance undertakings, which join sell-side firms, central counterparties and central securities depositories that began reporting in July. 
- Advertisement -