RegTech Insight Brief
West African Development Bank (BOAD) Selects Wolters Kluwer’s OneSumX Solution for Risk Management
BOAD, the common development finance institution of the member countries of the West African Monetary Union (WAMU), specifically selected the Asset and Liability Management (ALM), Liquidity Risk, Market Risk, and Credit Risk components of OneSumX for Risk Management, to monitor performance, profitability and capital adequacy (both regulatory and economic). To assist in the bank’s decision making, the solution will also cover the parameters of BOAD’s risk appetite framework. The bank chose the solution with the aim of implementing an integrated approach to risk management and financial planning in order to strengthen its financial governance.
Industry Supports Pre-Cessation LIBOR Fallbacks, Finds ISDA
ISDA has found that a significant majority of practitioners would prefer to include pre-cessation and permanent cessation fallbacks without optionality or flexibility. The feedback comes in response to a consultation launched by ISDA in February which asked whether the 2006 ISDA Definitions should be amended to include fallbacks that would apply to all covered derivatives referencing LIBOR following a permanent cessation of the benchmark or a ‘non-representative’ pre-cessation event, whichever occurs first. ISDA now expects to publish amendments to the 2006 ISDA Definitions to incorporate the fallbacks for new trades in July. A protocol will simultaneously be launched to allow participants to incorporate the revisions into legacy trades if they wish. Both will come into effect before the end of the year.
Kompli-Global and ComplyAdvantage Partner on Financial Crime
ComplyAdvantage has become the latest provider to add to the Kompli-QED remote corporate onboarding platform, in a strategic partnership between the two firms to fight financial crime and money laundering. Kompli-QED is a remote onboarding platform that combines proprietary solutions with best-in-class third party offerings. “ComplyAdvantage significantly enhances the platform with real-time sactions and PEP screening against global enforcement watchlists. This is a tremendous advantage as increasingly criminals get to know the frequency with which static databases are updated and look to exploit the time lag in updating them. ComplyAdvantage also shares our approach to letting Augmented Intelligence (AI) do the heavy lifting,” says ComplyAdvantage CEO Jane Jee.
Accenture Acquires NIKE Group in RegTech Push
Accenture has successfully acquired NIKE Group, an Italian consulting firm that provides RegTech services and solutions to financial services firms, in a deal first announced on 14 April. NIKE Group’s data-driven approach and compliance platform help clients monitor new regulatory requirements and assist with compliance. The NIKE Group team will join Accenture’s Italian Financial Services practice. Financial terms were not disclosed.
Saudi G20 Presidency and BIS Launch RegTech Innovation Hub
The Saudi G20 Presidency and the Bank for International Settlements (BIS) Innovation Hub have launched the G20 TechSprint Initiative to highlight the potential for new technologies to resolve regulatory compliance (RegTech) and supervision (SupTech) challenges. The problem statements identify challenges in regulatory reporting, analytics, and monitoring and supervision, and have been developed from submissions received from Financial Stability Board (FSB) member jurisdictions. Interested private firms can compete and develop innovative solutions to these problems using a cloud-based APIX platform. The hackathon-style competition is also supported by the Monetary Authority of Singapore (MAS), the FSB, API Exchange (APIX), and the RegTech for Regulators Accelerator (R2A).
FCA Warns Firms on LIBOR Transition
The FCA has doubled down on its plans to phase out LIBOR by the end of 2021, warning in a 29 April statement that “it remains the central assumption that firms cannot rely on LIBOR being published after the end of 2021.” Although the regulator recognises the challenges presented by the current operating environment under COVID-19, it notes that “continued progress” has been seen – including the first syndicated loan that will link to SONIA and SOFR, and a successful consent solicitation to convert a legacy LIBOR referencing bond, while within sterling cash markets, transition to SONIA in the bond market has been largely completed. The Working Group on Sterling Risk-Free Reference Rates (RFRWG) confirms that by the end of Q3 2020 lenders should be in a position to offer non-LIBOR linked products, while all new issuance of sterling LIBOR-referencing loan products that expire after the end of 2021 should cease by the end of Q1 2021.
Waymark Tech Wins Phase 2 Grant from SBRI and GovTech Catalyst
In collaboration with the Better Regulation Executive and funded by the GovTech Catalyst, AI specialist Waymark Tech is developing a new solution to promote understanding of existing regulation and to provide analysis that informs and improves the way in which new regulations are introduced in the future. Founded in 2016, Waymark Tech offers AI-as-a-Service to reveal hidden patterns and connections within vast, dynamic and unstructured text datasets. The new project will develop state of the art natural language processing (NLP) technology that will systematically extract information from thousands of pages of UK legislation and then model the burden it applies on businesses, as well as tagging the content for ease of access.
SmartSearch Hailed in Sunday Times Profit Track List
Yorkshire-based anti-money laundering software specialists SmartSearch have achieved 15th position in the 2020 Sunday Times Profit Track list, which recognises the British companies with the fastest-growing profits over the last three years. The firm has seen an increase of more than 80% in profits over the past year, and a six-fold rise over the three-year period looked at by the list, which is in its 21st year, with the latest version launched as the COVID-19 edition. SmartSearch has introduced a Rapid Response Service to help firms deal with coronavirus challenges, enabling them to set up on its digital platform in less than 48 hours in order to verify customer ID without physical documents.
Westpac Provisions $900m for Record AML Fine
Australian bank Westpac has reportedly set aside $900 million to cover its “potential liability” in what could be the biggest corporate fine in Australia’s history, following accusations by AUSTRAC (the Australian Transaction Reports and Analysis Centre, a government financial intelligence unit set up to combat financial crime) of 23 million breaches of AML and counter terrorism finance laws, including the failure to properly monitor transactions arguably related to child exploitation in South-East Asia. The bank is also believed to have set aside $160 million to finance its response plan, including the scaling up of its financial crimes investigation unit. The case remains before the Australian courts.
ESMA and MAS Sign MOU on Singapore’s Financial Benchmarks
ESMA, the EU’s securities markets regulator, has signed an agreement with the Monetary Authority of Singapore (MAS) completing the process to allow the use of Singapore’s financial benchmarks in the EU. Under the MOU, ESMA and MAS will share information and supervisory activities on Singapore-regulated financial benchmarks. The signing of the MOU follows the European Commission’s equivalence decision recognising Singapore’s regulatory framework on financial benchmarks as equivalent to the requirements under the EU’s Benchmarks Regulation. The agreement and the equivalence decision will allow financial institutions in the EU to continue using, as reference rates in their contracts, both SIBOR and the Singapore Dollar Swap Offer Rate (SOR), which are financial benchmarks regulated in Singapore.