Compliance Costs Hit Profits at Commonwealth Bank

Australia’s biggest bank has seen profits slump by 8.1% following regulatory and compliance costs of over $1 billion amid a series of scandals, lawsuits and regulatory investigations. According to CEO Matt Comyn, Commonwealth is currently handling a number of “regulatory and risk projects.” The bank is working with RegTech firm Red Marker to implement a real-time compliance tool to automate manual processes. It is also experimenting with voice detection technologies and has built an engine that can run sequences based on existing data sets to identify compliance trends and issues.

Axioma Adds Upgraded UK Equity Risk Model

Axioma has added a new UK equity risk model (AXUK4) to its next-generation Equity Factor Risk Model suite. The release builds on existing risk models, offering enhanced country-specific content to meet the risk-management needs of investors. AXUK4 delivers risk insights on over 6,000 UK Kingdom-listed securities, including REITs and ETFs. The updated model incorporates deep daily history, with coverage starting in 1997 to enable portfolio construction and back testing, transparent attribution, and hedging.

Dubai Banks Launch New KYC Data-Sharing Platform

Dubai International Financial Centre (DIFC), Mashreq Bank and fintech firm Norbloc have teamed up to launch the Middle East region’s first blockchain-based KYC data-sharing consortium. The joint venture, expected to go live in Q1 2020, is designed to facilitate faster, more secure onboarding and exchange of supporting documentation via advanced distributed technologies, including blockchain. Companies will be able to digitally create a single KYC record, which will be authenticated with an electronic ID, to simultaneously share data with multiple financial institutions. The platform will be open to all qualified financial institutions and licencing authorities.

Natixis Selects Redland Solutions for Accountability Solution

Natixis Investment Managers UK has chosen Redland’s SM&CR Software-as-a-Service (SaaS) solution. The solution will assist Natixis to comply with all elements of the Accountability Regime, including SM&CR, Management Responsibility Maps, Statements of Responsibility, Fitness & Propriety, Certification, Conduct Attestation and Conduct Rule Breaches. Birmingham, UK-based Redland Solutions was acquired by Ideagen in June 2019.

Swift to Connect KYC Registry with Regional Utilities

Swift, a global provider of secure financial messaging services, is reportedly in talks with regional KYC utilities regarding the potential connection of their solutions with its KYC Registry, an online portal set up in 2014 to manager and share KYC due diligence and information.

Although the registry has until now been used only by financial institutions with correspondent banking services, the firm is planning to open the service up to corporate clients by the end of 2019.

Volkswagen Bank Chooses BearingPoint for Regulatory Reporting

Germany’s Volkswagen Bank has confirmed a switch from an in-house regulatory reporting solution to the standard Abacus360 Banking Regulatory software package from BearingPoint. BearingPoint will provide the software and also take over the tasks and processes of the technical operation, in addition to providing infrastructure and support services within the scope of managed services. Volkswagen will also outsource the supply chain from its own data warehouse to BearingPoint.

ESMA Makes New Bond Liquidity Data Available

From the 1st August the European Securities and Markets Authority (ESMA) has made available new data for bonds subject to the pre- and post-trade requirements of MiFID II and MiFIR through its data register.

MiFID II, which came into force in January 2018, introduced pre- and post-trade transparency requirements for equity and non-equity instruments, including for bonds. Post-trade, MiFID II requires real-time publication of the price and quantity of trades in liquid bonds. It is possible to defer the publication of post-trade reports if the instrument does not have a liquid market, or if the transaction size is above large-in-scale thresholds (LIS), or above a size specific to the instrument (SSTI). In order to assist market participants to know whether a bond should be considered as liquid or not, ESMA now publishes these quarterly liquidity assessments for bonds.

For the current period, there are 594 liquid bonds subject to MiFID II transparency requirements.

SIX Releases Marijuana Related Data Service

SIX has introduced a service covering over 30,000 securities connected with Marijuana Related Businesses (MRBs). The service reflects the changing legal landscape around marijuana. In the US, marijuana has been legalised in some states, but is criminal at federal level. As a result, in some states MRBs can raise money via capital markets, enabling investors to access MRB linked securities. Some countries in Europe consider investing in MRBs as money laundering. MRB Securities service, built on the same model as the SIX Sanctioned Securities Monitoring Service, identifies and lists securities that are directly or indirectly issued by listed MRB entities.

Law Society Endorses Accuity AML Solutions

Accuity, a global provider of financial crime screening, payments and know your customer (KYC) solutions, has been endorsed by theLaw Society of England and Walesfor the provision of anti-money laundering (AML) solutions for the legal sector.Accuity was awarded the three-year endorsement and partnership contract for a fourth consecutive term, having worked with the Law Society to raise the standard of financial crime compliance across the legal sector since 2009. The Law Society is the professional body for 9,452 law firms and 140,000 practising solicitors in England and Wales.

Axioma Launches New Linked Models in Risk Model Machine

Enterprise risk management and regulatory reporting specialist Axioma has launched Linked Models, a new feature of its Risk Model Machine solution, offering the investment industry astreamlined view of risk across regions or sectors, with the objective of creating consistency in the risk/return profile as viewed from the front and middle offices. The solution enables managers to create a custom risk model that captures exposures from all regions or sectors, avoiding inconsistencies or skewed reporting.