Capital markets in the US and Europe are fraught with uncertainty following the election of President Trump in the US and the start of the Brexit process in the UK, but what material effects will these changes have on data management and will they present more opportunities than threats?
The regulatory landscape in uncertain times and the data management response for 2017 were discussed during a panel session at A-Team Group’s Data Management Summit in New York City earlier this month. The panel was moderated by David Blaszkowsky, managing consultant at RGP, and joined by Tim Lind, principal, RTech Advisors; Roger Fahy, vice president and chief operating officer, CUSIP Global Services; and Hudson Hollister, founder and executive director, Data Coalition.
Blaszkowsky’s first question asked whether Trump, Brexit and wars galore meant capital markets are entering a period of higher volatility. Lind said he expects no change in market volatility as the Trump administration cannot make wholescale change to regulation in the short term. Fahy commented: “We are at a stage of maturity with regulation in data management, the industry is not prepared to undo what has been done. The principles that drove regulation still exist today.” Hollister said the Trump election won’t change anything in the data management industry, but noted the ongoing need for regulators to exercise leadership in implementing open data standards that could make compliance easier.
Commenting on the opportunities and threats of regulation, Lind said: “Markets in Financial Instruments Directive II (MiFID II) requires information on asset classes we have never seen before. This means trade reporting will give a better view of the health of the market.” On a less positive note, he pointed to fundamental regulatory changes that threaten markets by causing a lack of liquidity, as well as the unintended consequences of regulation.
Hollister saw no regulatory threats, but only opportunities in the increasing adoption of non-proprietary data standards and the US Financial Transparency Act. The act was put before congress in March 2017 and directs the Office of Financial Research of the Department of the Treasury and eight US financial regulatory agencies to adopt data standards for all corporate financial information collected or received by them. Hollister commented: “The act will take many years to implement, but it will reform and standardise data communication, and let data flow for the first time.”
