Taking the Pulse of Reporting and Capital Adequacy Compliance
Commonalities in European rulemaking still need to be translated into industry systems
![michael-shashoua-waters michael-shashoua-waters](/sites/default/files/styles/landscape_750_463/public/import/IMG/317/167317/michael-shashoua-waters.JPG.webp?h=acfe3244&itok=ceJMABf4)
Financial services industry market participants are trying to find enough overlap between major new regulations such as MiFID II/MiFIR, BCBS 239 and Solvency II to be able to achieve more with a single data management effort.
This dilemma has emerged during discussions at our European Regulatory Roadshow series, which started recently with Paris and Copenhagen events. The series, hosted by Waters, Inside Market Data and Inside Reference Data, will continue with events in Frankfurt on October 14, Zurich on October 27 and Amsterdam on November 26.
Interactive Data regulatory product executive Hubert Deroubaix told Copenhagen attendees that the lack of overlap is making data management for regulatory compliance a complex and costly proposition.
Although MiFID (Markets in Financial Instruments Directive) II and its associated MiFIR regulation, BCBS 239, Solvency II and the US Foreign Account Tax Compliance Act, which also can figure into the European regulatory mix, all have their distinct provisions and idiosyncrasies, in the end, all of these sets of rules center on two things: reporting and capital adequacy.
BCBS 239 mandates risk data aggregation principles and sets out annual risk data stress tests beginning next year. Similarly, Solvency II, the European Union directive that takes effect on January 1, sets reporting requirements to demonstrate capital adequacy in the insurance segment of the financial services industry. MiFID II/MiFIR are concerned just with reporting overall, without delving into capital adequacy, tax withholding compliance or anything specific about the content of what is being reported and how that may meet desired standards for the financial industry.
It may have been understandable in 2013 or 2014 that data aggregation, governance and processing plans and systems were not in place or up to the demands to come from BCBS 239, as shown in survey results released earlier this year.
But months have passed since those results, and now there are just a few short months before BCBS 239 and Solvency II provisions are going to be the law. It will be interesting to see in the upcoming European Regulatory Roadshow events happening through the end of 2015, whether the industry's pulse—in terms of the functioning of data aggregation governance, architecture and processes for compliance with reporting and capital adequacy rules—has quickened.
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.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
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. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@waterstechnology.com
More on Regulation
Finra clears hurdle with CAT launch, but several others remain
Two major components of the consolidated audit trail are now in place. But wrangling over the CAT’s future continues.
Bloomberg, industry bodies push back on Cboe’s proposed OEMS rule change
Some industry bodies disagree with the options exchange’s proposal to carve its Silexx OEMS out of the SEC’s definition of an exchange facility and place it into a separate business line.
GenAI: US Fed reveals its five use cases
Internal sandbox used to assess viability and risks; coding and content generation on the agenda.
Zeros and ones: Industry contemplates T+0 as the next step
With the North American transition to T+1 settlement complete, same-day settlement could be the next goalpost set, though skeptics are many.
The IMD Wrap: Déjà vu as exchange data industry weighs its options
Max highlights some of WatersTechnology’s recent reporting on data costs and capacity issues facing the options industry, and asks, haven’t we seen this before somewhere?
FRTB data quality issues persist amid shifting implementation dates
Banks are finding market and reference data challenges posed by the FRTB’s standardized model tricky, compounded by uncertainty over when the regulation will take effect.
Cboe pushes rule change to make way for proprietary Opra alternatives
As US options data has grown in volume and cost, Cboe says changing the public feed's governing document would make way for more competition from private alternatives, including its Cboe One Options Feed, launched in 2023.
Regulators urged to promote cyber security investment
Public interest in stopping cyber attacks that could trigger bank runs, says Bundesbank researcher