Firms need to plan early for reg landscape transition, says Ferrise
10 May 2018 London
Image: Shutterstock
Firms need to plan early for changing in the changing regulatory landscape the industry is currently seeing, according to Andrea Ferrise, regulatory compliance officer at UnaVista, who was speaking at the Finadium Investors of Securities Lending Conference.
During the presentation, Ferrise discussed topics including the rationale for Securities Financing Transaction Regulation (SFTR) and the second Markets in Financial Instruments Directive (MiFID II), as well as what the regulator has in mind when drafting the regulation.
He opened the session by posing the question: “Is it time for the financial system to slim down?”
He also advised to reform compensation practices to support financial stability, introduce new reporting requirements to get more data granularity and improve OTC derivatives market.
Ferrise said: “The regulation wave started after the financial crisis in 2008 when due to lack of data, the field for regulators and supervisors grew to detect potential cases of market abuse, it had been decided to intervene and regulate those markets.”
According to Ferrise, since 2014, the industry has seen so many different regulations before finally seeing SFTR.
“As you know,” Ferrise said, “reconciliation is one of the challenges, both legs of the trade should be reconciled".
He continued: “What I consider to be the most important approach today, is that different approaches will bring different results. The Markets in Financial Instruments Regulation (MiFIR) is a great success because most of the market participants were advanced.”
He also looked at the European Securities and Markets Authority’s (ESMAs) tools: trace, engagement with data users, inter-TR reconciliation (TRs), and data access.
Trace allows national competent authorities (NCAs) to have a single point of access to the data stored by TRs under the European Market Infrastructure Regulation (EMIR) legislation, whilst engagement with data users involves collecting information on data quality issues from data users through a standardised template.
Ferrise explained that these issues are then assessed and prioritised by ESMA.
During the presentation, Ferrise discussed topics including the rationale for Securities Financing Transaction Regulation (SFTR) and the second Markets in Financial Instruments Directive (MiFID II), as well as what the regulator has in mind when drafting the regulation.
He opened the session by posing the question: “Is it time for the financial system to slim down?”
He also advised to reform compensation practices to support financial stability, introduce new reporting requirements to get more data granularity and improve OTC derivatives market.
Ferrise said: “The regulation wave started after the financial crisis in 2008 when due to lack of data, the field for regulators and supervisors grew to detect potential cases of market abuse, it had been decided to intervene and regulate those markets.”
According to Ferrise, since 2014, the industry has seen so many different regulations before finally seeing SFTR.
“As you know,” Ferrise said, “reconciliation is one of the challenges, both legs of the trade should be reconciled".
He continued: “What I consider to be the most important approach today, is that different approaches will bring different results. The Markets in Financial Instruments Regulation (MiFIR) is a great success because most of the market participants were advanced.”
He also looked at the European Securities and Markets Authority’s (ESMAs) tools: trace, engagement with data users, inter-TR reconciliation (TRs), and data access.
Trace allows national competent authorities (NCAs) to have a single point of access to the data stored by TRs under the European Market Infrastructure Regulation (EMIR) legislation, whilst engagement with data users involves collecting information on data quality issues from data users through a standardised template.
Ferrise explained that these issues are then assessed and prioritised by ESMA.
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