Achieving Regulatory Convergence – “Just not cricket”


– by Alan McIntyre, Industry Relations Lead, Europe

Risk Focus were proud to field a few players at yesterday’s innings at the Kia Oval. Fortunately for yours truly as a Scotsman who is baffled by the sport (and assumes you need a Masters degree in Mathematics just to follow the score!), cricket was not on the agenda. Instead the home of English cricket was hosting the 6th annual City Week which in the words of the organizers “is the premier international gathering of the international financial services community. It brings together policy makers and senior industry representatives from around the globe”.

We would like to offer our thanks and congratulations to City Week on hosting a successful and informative event with some very knowledgeable senior industry figures.

The session on Achieving Regulatory Convergence which included the acting Chief Executive of the FCA, Tracey McDermott, Benoît de Juvigny,  Secretary General of the lead French regulator, the AMF, and Shunsuke Shirakawa, Deputy Commissioner of Japans Financial Services Agency set the tone with the current avalanche of regulations being described by Tracey McDermott as “the new normal”.

The panel of top regulators expressed sympathy with the banks and asset managers for the ongoing costs of efforts to build/improve systems in line with all the upcoming regulations and reporting. But a frank assessment offered was that “the regulations are evolving in the right direction but it takes time”.

The MIFID II session (Preparing for the New World of Securities Trading) was clearly very close to Risk Focus’s heart as we continue to enhance our beta version of MiFID II/MiFIR transaction reporting validation in our Validate.Trade solution. Again the panel here was A-list with Verena Ross, Executive Director of ESMA, Larry Thompson, Vice Chairman and General Counsel of DTCC, and Interim Chief Executive of The Investment Association, Guy Sears included.

All of the panellists made excellent contributions. Verena Ross advised that ESMA is continuing to work on ensuring that all of the reference data for determining transparency reporting requirements will be made available by ESMA as a “one stop shop” for obtaining this data. Risk Focus are working on integrating the evolving MIFID Database as a reference data service into our solutions so will be following these developments very closely.

Verena Ross stated that the focus of ESMA will be increasingly on issuing Level 3 guidance such as Q&A’s as the focus moves from rule-making to implementation and invited the industry to submit their questions in as much detail as possible sooner rather than later as that MIFID 2 clock is ticking steadily towards January 2018.

Whilst the session was primarily around MIFID II it was also noted that work continues across the industry on the EMIR Article 9 RTS rewrite and the SFTR reporting requirements. The ‘new normal’ indeed!

The session ended on a light hearted note with a panellist suggesting that we would all be in the same room in 6 or 7 years’ time discussing MIFID 3. Given the recent speed of regulatory reform I suspect the jury is out on whether this is really such an implausible suggestion.

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