IMN: cyber concerns about regulators
05 February 2016 Phoenix, Arizona
Image: Shutterstock
Unanswered questions about the security of reported data stored by regional regulators should be a major concern for beneficial owners, according to a panellist at IMN’s Beneficial Owners' International Securities Lending & Collateral Management Conference.
"Some of our clients are not comfortable even giving data to data providers but now they will have to," explained one representative from a major investment bank.
"What happens if there is an incident? What happens to all this data? We really don’t have any answers."
The audience, including many beneficial owners, heard how reporting requirements are creating a growing exposure to cyber crime, and regulators are yet to offer a viable solution.
Regulators are currently undertaking a massive programme to make securities finance more transparent, with the Financial Stability Board (FSB) and regulators in Europe and the US all working on rules.
In Europe, the Securities Financing Transactions Regulation is already in effect, while the FSB has finalised its recommendations on increasing data reporting requirements for securities financing transactions.
Inconsistent reporting requirements between regions are putting a strain on all industry players, heard the audience.
Multiple and often overlapping regulatory requirements for reporting mean that global players must deliver the same data in many different ways to each regional regulator.
"A lot of jurisdictions haven't figured out their remit is," explained Michael McAuley of BNY Mellon.
The audience heard that some regulators remain unsure on what type of data they are looking for or even what questions they are looking to answer from this reported data.
"Some of our clients are not comfortable even giving data to data providers but now they will have to," explained one representative from a major investment bank.
"What happens if there is an incident? What happens to all this data? We really don’t have any answers."
The audience, including many beneficial owners, heard how reporting requirements are creating a growing exposure to cyber crime, and regulators are yet to offer a viable solution.
Regulators are currently undertaking a massive programme to make securities finance more transparent, with the Financial Stability Board (FSB) and regulators in Europe and the US all working on rules.
In Europe, the Securities Financing Transactions Regulation is already in effect, while the FSB has finalised its recommendations on increasing data reporting requirements for securities financing transactions.
Inconsistent reporting requirements between regions are putting a strain on all industry players, heard the audience.
Multiple and often overlapping regulatory requirements for reporting mean that global players must deliver the same data in many different ways to each regional regulator.
"A lot of jurisdictions haven't figured out their remit is," explained Michael McAuley of BNY Mellon.
The audience heard that some regulators remain unsure on what type of data they are looking for or even what questions they are looking to answer from this reported data.
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