Open Platform: License Inventory Systems - Futuristic Vision or Technological Reality?
The industry is facing a raft of new regulations, all with substantial and stringent data requirements. Tatiana Zheleznyak, a consultant in Deloitte’s Audit & Risk Advisory division outlines how smart license management can support better compliance.
![Tatiana Zheleznayak tatiana-zheleznayak-deloitte](/sites/default/files/styles/landscape_750_463/public/2017-10/Open%20Platform%20-%20Tatiana%20Zheleznayak%2C%20Deloitte.jpg.webp?h=84e58916&itok=KMARjRQp)
Through machine learning, the industry will automate reporting and compliance processes, thus creating large cost-saving opportunities.
According to Bloomberg’s survey of 10 top tier sell-side firms in London, roughly 2.5 million documents need to be reviewed between sell- and buy- side firms to be MiFID II compliant. This, combined with other financial regulations, creates a challenge for financial institutions to process such huge volumes of paperwork without increasing administrational and legal costs for more resources.
Onboarding new reference data parsing systems and tools to automate existing manual processing operations (i.e. exchange of contracts by email or post) will result in a number of benefits. These include minimizing handling time to speed up licensing, reduction of regulatory costs, and lowering of the workload burden of both legal and operations departments.
The concept of a smart license inventory system is simple. Primarily, the inventory system will not only store and encrypt all licenses between vendors, exchanges and end users, but will also tackle the very issues that bring large “dollar liabilities” for end users. This typically includes a lack of uniformity, the reluctance to agree definitions, the tendency for some sources to interpret permitted usage policies in a way that benefits a segment of the industry but not the whole. In other words, the licensing landscape should be reshaped by creating uniform clauses in agreements and contracts. As a result, it will be possible to automate renewal of licenses as well as make amending and revising licenses more efficient. This process avoids the exchange of physical papers, speeds up licensing processes, and reinforces compliance by licensees.
The proposed inventory system will assist in achieving and maintaining licensing compliance—albeit without the corresponding uniform licensing policies—and, crucially, interpretation of those permitted usage clauses.
Data sources, exchanges, industry bodies, end users and redistributors will need to publicly agree changes: market data licensing is currently in the hands of the few who sometimes apply a varied interpretation that may be construed as being revenue driven (and licensing is, typically about a year behind the curve), and whose top priority is to get the most from the intellectual property held within market data. For instance, some of the changes might be agreeing universal definitions, structure of licensing contracts and their logic and interpretation.
The market data industry has reached a stage where institutions are being forced to adopt policies for which their technology and practices cannot be changed within the standard 90 days prior notice period given by exchanges—for example, for algorithmic development, risk management and reporting, transaction reporting, among others. Technology has driven efficiency, allowing for previous thinking and boundaries to be re-written: the oft-templated and static license inventory system must now face its future: as not merely an “inventory,” but as a solution in itself by resolving licensing compliance issues.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@waterstechnology.com or view our subscription options here: http://subscriptions.waterstechnology.com/subscribe
You are currently unable to print this content. Please contact info@waterstechnology.com to find out more.
You are currently unable to copy this content. Please contact info@waterstechnology.com to find out more.
Copyright Infopro Digital Limited. All rights reserved.
As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (point 2.4), printing is limited to a single copy.
If you would like to purchase additional rights please email info@waterstechnology.com
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. As outlined in our terms and conditions, https://www.infopro-digital.com/terms-and-conditions/subscriptions/ (clause 2.4), an Authorised User may only make one copy of the materials for their own personal use. You must also comply with the restrictions in clause 2.5.
If you would like to purchase additional rights please email info@waterstechnology.com
More on Data Management
How a Chinese AI firm shook the tech world
DeepSeek’s AI model is the very ethos of doing what you can with what you have.
To unlock $40T private markets, Hamilton Lane embraced automation
In search of greater transparency and higher quality data, asset managers are taking a tech-first approach to resource gathering in an area that has major data problems.
FactSet-LiquidityBook: The buy-side OMS space continues to shrink
Waters Wrap: Anthony spoke with buy-side firms and industry experts to get a feel for how the market is reacting to this latest tie-up.
S&P sees strong demand for GenAI tools as leadership changes hands
The data provider released several AI-enabled tools and augmentations to existing platforms in 2024 and plans to continue to capitalize on the technology in 2025.
To modernize loan markets, making data more accessible is key
Wilmington Trust is using AccessFintech’s Synergy platform to ditch faxes and emails in the increasingly popular asset class.
Lucrative market data deal with LSEG fuels Tradeweb’s record quarter
The fixed-income trading venue realized gains from its 2023 deal with the London Stock Exchange Group, amid soaring revenues from market data providers industry-wide.
Is overnight equities trading a fad or the future?
Competition is heating up in US equity markets as more venues look to provide trading from twilight to dawn. But overnight trading has skeptics, and there are technical considerations to address.
DTCC revamps data distribution, collection efforts with cloud, AI
The US clearinghouse is evaluating the possibilities that cloud and AI offer to streamline the processes by which it collects and makes data available to market participants.