RegTek Solutions, a subsidiary of Risk Focus formed early this year, has introduced EMIR-Ready, a regulatory readiness testing and validation service designed to help firms within the scope of European Market Infrastructure Regulation (EMIR) comply with changes to the regulation’s Regulatory Technical Standards (RTS) that come into play on 1 November 2017. EMIR-Ready is a tactical regulatory fix, developed to reduce the costs and risks of complying with the revised RTS, but it is also part of a broader set of regulatory solutions that can be implemented as part of a strategic approach to regulatory compliance.
EMIR-Ready provides unlimited testing and diagnostic support for the analysis, development and testing of new regulatory reporting requirements. The service will run from June to November 2017 and is hosted in the Amazon AWS cloud.
Brian Lynch, CEO of RegTek, says: “Our strategy is to build modular software that can be integrated with incumbent software at large banks and broker dealers. It is very difficult for these firms to introduce new platforms, but many are looking at what they have built over the past five or six years and want to take a more strategic approach to regulation that is cost effective and will scale in future. We are selling into this space, with a goal to deliver strategic solutions that will be achieved by implementing a number of tactical products.”
EMIR-Ready is a tactical product covering the upcoming RTS changes required by the European Securities and Markets Authority (ESMA) and is a customised version of Validate.Trade, RekTek’s flagship product that is already being used by several large banks to test reporting submissions to trade repositories and monitor the quality of regulatory output.
EMIR-Ready includes specific rules relevant to the RTS changes, allowing users to test reporting outputs and build confidence in their response to the changes. Andy Green, RegTek Solutions European head, comments: “EMIR-Ready promises to get clients to a significantly higher level of confidence at a lower cost. In 2015, firms spent millions of Euros getting ready for ESMA Level 2 validations and the results weren’t great. Regulators are expected to be tougher this time round.”
RegTek was spun out of Risk Focus to develop the latter’s Report-it set of software controls for global trade and transaction reporting, including Validate.Trade, Reportable.Trade, Load.Trade and Reconcile.Trade. It was established in January 2017 and is in the final stages of Series A funding, although Risk Focus will remain the largest shareholder in the company. To date, 13 large banks are using RegTek software, with most of them using elements of the company’s global platform that provides testing and validation support for EMIR, Dodd-Frank and other jurisdictional regulations mandated by organisations such as the Australian Securities and Investments Commission, Hong Kong Monetary Authority and Monetary Authority of Singapore.
The company has also introduced a testing and validation service for Markets in Financial Instruments Regulation (MiFIR) reporting and is looking at providing test environments for the US Consolidated Audit Trail (CAT) and Regulation Securities-Based Swap Reporting (SBSR), as well as the EU Securities Financing Transactions Regulation (SFTR). It also continues to accommodate regulatory changes in different jurisdictions.