The leading knowledge platform for the financial technology industry
The leading knowledge platform for the financial technology industry

A-Team Insight Blogs

Regulators Focusing on Data Sharing Cross Border, Says FRSGlobal’s Blair-Ford

Not only is the regulatory community asking firms to get their data management systems in order, it is also seeking greater coordination between its own constituents, explains Selwyn Blair-Ford, head of global regulatory policy at solution vendor FRSGlobal. A lot of the recent work that has gone into structuring the new EU regulatory framework has been focused on getting the data sharing foundations right.

There are a barrage of new data requirements heading the industry’s way, from the client categorisation and identification challenges identified during the MiFID review to the UK Financial Services Authority’s Single Customer View (SCV) regime. However, national regulators are also being called upon to improve their data management and sharing practices in order to be able to provide the correct information to the new pan-European regulatory bodies and the Office of Financial Research in the US.

Blair-Ford explains that the pan-European bodies such as the European Systemic Risk Board (ESRB) will not require firms to report to them directly (apart from in “extreme or unusual cases”), but will instead ask national regulators to provide this data in a suitable format. Although the new regime will not hand as much power to these new bodies as was once feared by national regulators (the FSA included), it will “impose a new level of uniformity among regulators regarding data,” says Blair-Ford. This data standardisation is therefore likely to filter down the system to firms’ own reporting practices in time.

The 7 July EU resolution on cross border crisis management also throws the spotlight on data sharing practices, he says. The focus is on ending the concept of a firm being too big to fail and allowing for much more regulatory cooperation in a cross border environment. The International Monetary Fund (IMF) has examined the supervisory angle across geographic borders and identified some of the barriers to the sharing of information in the current market.

“Now there is a need for actual procedural mechanisms to be put into place to allow for these barriers to be removed,” says Blair-Ford. To this end, the Committee of European Banking Supervisors (CEBS) has drawn up a number of common data templates on which national regulators should base their own reporting requirements for firms under their jurisdiction, all done as part of its amendment to COREP.

In the US, the Dodd-Frank Act has established the Financial Stability Oversight Council, which is essentially parallel to Europe’s ESRB and will involve a similar level of risk data sharing amongst the country’s numerous regulators. The act has also added a whole host of new data requirements into the regulatory mix, ranging from requiring much more information from firms about securitised assets to asking credit ratings agencies to provide both quantitative and qualitative data and historic rating performance data to the Securities and Exchange Commission (SEC).

On a global scale, Basel III is also on the horizon with its redefinition of regulatory capital, which is in line with Dodd-Frank Act. As Blair-Ford notes, counterparty credit risk will be determined using stressed inputs and will be subject to a new level of risk weighting for certain assets, thus adding to the data gathering exercise.

For its part, FRSGlobal has been pitching its Datamart solution as a source of clean and validated data acquired from firms’ multiple internal source systems. The solution purports to structure this data into a suitable format for regulatory reporting and risk management purposes, such as stress testing for external and internal management information system (MIS) reports. The vendor also highlights its dashboard capabilities to be able to provide this data at a glance to users, which it added in July this year.

Related content

WEBINAR

Recorded Webinar: Trade surveillance: Deploying monitoring and surveillance capabilities for today’s new normal

Let’s face it: The old ways aren’t coming back. A plethora of challenges brought on by the covid-19 pandemic, coupled with unrelenting market volatility and uncertainty, have pushed financial service firms to look for rigorous monitoring and surveillance solutions to meet the demands of the emerging trading landscape. Working from home (WFH) has increased the...

BLOG

IHS Markit Expands Reporting Capability with Cappitech Acquisition

As the global demand for regulatory reporting solutions continues to soar amidst a challenging environment, IHS Markit has taken the bull by the horns with its acquisition of Israeli RegTech specialist Cappitech. Financial terms were not disclosed, but it seems as if the deal may have been in the pipeline for a while. Although Cappitech...

EVENT

TradingTech Summit London

The TradingTech Summit in London brings together European senior-level decision makers in trading technology, electronic execution and trading architecture to discuss how firms can use high performance technologies to optimise trading in the new regulatory environment.

GUIDE

RegTech Suppliers Guide 2020/2021

Welcome to the second edition of A-Team Group’s RegTech Suppliers Guide, an essential aid for financial institutions sourcing innovative solutions to improve their regulatory response, and a showcase for encumbent and new RegTech vendors with offerings designed to match market demand. Available free of charge and based on an industry-wide survey, the guide provides a...