Transparency can be a success for reg reporting, according to panel
10 May 2018 London
Image: Shutterstock
Transparency can be a success if it achieves what it intends to, and if it has the transformative effect that it’s supposed to but that largely remains to be seen, according to a speaker at the Finadium Investors in Securities Lending Conference in London.
In a panel, which focused on the implications of regulation, speakers discussed topics including transparency and reporting, the burden of cost of regulation on the buy-side, and Brexit.
One panellist begun the session by claiming: “Essentially the main goal of regulatory reporting is transparency. What regulators are trying to achieve with added transparency in reporting is to help your system from risk.”
The panel was asked whether or not transparency will be a success or failure, to which the panel seemed optimistic.
A speaker warned that it has the potential to “dampen success”. The reason for this, the panellist explained, is “the sheer volume of data that needs to be collected. I still remain cynical of how that data is going to be used by authorities, messages may be lost”.
The panellist added: “On a more hopeful note, there are signs of positive effects on trading volumes and equity levels. The whole journey to transparency compliance allows real opportunities for our industry to tap into. Such as building for efficient solutions and forcing us to review existing processes. In my opinion, it is a good thing for the industry.”
“There are more positives than negatives,” another panellist agreed.
Turning attention to the second Markets in Financial Instruments Directive (MiFID II), one panellist explained: “As an industry, we are going through a steep learning curve when it comes to regulation. We have seen a great deal of transparency but not as much as everyone initially thought. MiFID II brought a greater transparency but it was limited. However, that level of transparency is going to increase.”
The panellist continued: “Lots of good work has been done. There are good eligibility engines out there and lots of vendors in this space that are having to be on top of their game for regulatory reporting.”
“This also means that when it comes to comparing repository it should be relatively simple because there is the standard message in the repository.”
The panel also stressed the importance of being well prepared for industry changes.
One speaker said: “One of the things that I’m nervous about for the industry, is that there is not long left to mobilise teams. The amount of work involved in this is staggering.”
The speaker warned: “You should know the impacts this has for your regulation. As vendors, we are required to be at the edge of what the industry is saying. There are lots of areas where interpretation can take place. If you haven’t started you’re already too late, essentially.”
The panel also discussed the implications of Brexit.
One panellist said: “One of the hottest topics with clients is Brexit. My key message to clients is don't take comfort from the transition period. Even getting office space can take weeks and months. We don’t have enough time and time is ticking now.”
The panellist continued: “Given its lack of transparency, firms have been hesitant in waiting for clarity and a lot of firms are seeing it as a burden that they have to react to. We have been engaging with those asset managers and looking at their funds.”
“Opportunity from Brexit needs to start now—seeing where those gaps in the market will be. That has been quite a positive thing from Brexit.”
The panellist advised: “Make decisions early and speak with your service provider, jurisdiction nimbleness is going to be critical as we run into that time frame.”
Another panellist concluded: “Planning and preparing for regulatory changes is key. Regulation is a driving change. It’s a key factor when we are determining our investor decisions.”
In a panel, which focused on the implications of regulation, speakers discussed topics including transparency and reporting, the burden of cost of regulation on the buy-side, and Brexit.
One panellist begun the session by claiming: “Essentially the main goal of regulatory reporting is transparency. What regulators are trying to achieve with added transparency in reporting is to help your system from risk.”
The panel was asked whether or not transparency will be a success or failure, to which the panel seemed optimistic.
A speaker warned that it has the potential to “dampen success”. The reason for this, the panellist explained, is “the sheer volume of data that needs to be collected. I still remain cynical of how that data is going to be used by authorities, messages may be lost”.
The panellist added: “On a more hopeful note, there are signs of positive effects on trading volumes and equity levels. The whole journey to transparency compliance allows real opportunities for our industry to tap into. Such as building for efficient solutions and forcing us to review existing processes. In my opinion, it is a good thing for the industry.”
“There are more positives than negatives,” another panellist agreed.
Turning attention to the second Markets in Financial Instruments Directive (MiFID II), one panellist explained: “As an industry, we are going through a steep learning curve when it comes to regulation. We have seen a great deal of transparency but not as much as everyone initially thought. MiFID II brought a greater transparency but it was limited. However, that level of transparency is going to increase.”
The panellist continued: “Lots of good work has been done. There are good eligibility engines out there and lots of vendors in this space that are having to be on top of their game for regulatory reporting.”
“This also means that when it comes to comparing repository it should be relatively simple because there is the standard message in the repository.”
The panel also stressed the importance of being well prepared for industry changes.
One speaker said: “One of the things that I’m nervous about for the industry, is that there is not long left to mobilise teams. The amount of work involved in this is staggering.”
The speaker warned: “You should know the impacts this has for your regulation. As vendors, we are required to be at the edge of what the industry is saying. There are lots of areas where interpretation can take place. If you haven’t started you’re already too late, essentially.”
The panel also discussed the implications of Brexit.
One panellist said: “One of the hottest topics with clients is Brexit. My key message to clients is don't take comfort from the transition period. Even getting office space can take weeks and months. We don’t have enough time and time is ticking now.”
The panellist continued: “Given its lack of transparency, firms have been hesitant in waiting for clarity and a lot of firms are seeing it as a burden that they have to react to. We have been engaging with those asset managers and looking at their funds.”
“Opportunity from Brexit needs to start now—seeing where those gaps in the market will be. That has been quite a positive thing from Brexit.”
The panellist advised: “Make decisions early and speak with your service provider, jurisdiction nimbleness is going to be critical as we run into that time frame.”
Another panellist concluded: “Planning and preparing for regulatory changes is key. Regulation is a driving change. It’s a key factor when we are determining our investor decisions.”
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