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Published by: Business Insights
Published: Feb. 1, 2007 - 100 Pages
Table of Contents
Executive Summary
‘Compliance fatigue’
MiFID
Reg NMS
Other regulations
Best practices in regulatory compliance
IT vendor opportunities
Chapter 1 Introduction
What is this report about?
Who is this report for?
Definitions
Algorithmic trading
Anti-Money Laundering (AML)
Basel II
Capital Requirements Directive (CRD)
Data taxonomy
eXtensible Business Reporting Language (XBRL)
International Accounting Standards (IAS)
International Financial Reporting Standards (IFRS)
Markets in Financial Instruments Directive (MiFID)
Patriot Act
Regulation NMS (Reg NMS)
Sarbanes-Oxley
Chapter 2 ‘Compliance fatigue’
Summary
The compliance burden
Overview of new regulations
MiFID and Reg NMS
Future outlook
Using compliance as a competitive edge
Chapter 3 MiFID
Summary
MiFID in detail
Benefits of MiFID
Weaknesses of MiFID
The regulatory compliance challenge
Opportunities for IT vendors
Operational and business implications
Technology implications
Electronic order handling and trade execution systems
Automation
Data providers and the use of market data
Data storage
Permanent availability of data
Stronger security
Consolidation
Technology vendors
Chapter 4 Reg NMS
Summary
Reg NMS in detail
The regulatory compliance challenge
Market implications
Exchange price wars
Technology implications
Explosion in market data
Regulation acting as a catalyst for algorithm growth
Opportunities for IT vendors
Chapter 5 Other regulations
Summary
Other regulations
Sarbanes-Oxley
Basel II
Patriot Act
Regulatory compliance IT spending trends
Chapter 6 Best practices in regulatory
compliance
Summary
Typical enterprise approach to compliance
Strategies, policies and procedures for success
Expanding roles for compliance and risk personnel
Adopting a process-driven approach
Corporate governance
Scenario-based approach to defining compliance business requirements
Regulatory compliance should be an enterprise endeavor
Holistic regulatory compliance initiatives
Chapter 7 IT vendor opportunities
Summary
Introduction
Finding additional value in compliance
Investors are driving holistic compliance trend
Centralized services
Companies should set up a deliverable that satisfies multiple compliance
needs
Technologies that can assist regulatory compliance
In-house assessments
Regulations are not specific about which technologies can achieve regulatory
compliance
XBRL-compliant reporting systems, data and documents
Do not underestimate the complexity and effort required
Consolidate disparate reporting applications
Analytics and reporting tools
Data standardization can help FSIs comply with more than one regulation
Adoption of data management protocols
Data management policies and procedures need to be pushed from
upper management
ILM strategies
Co-ordination of relevant ILM tools and solutions is required
Offering an ILM solution
ILM involves products, policies and strategies
Email management
in hand
Policies for email and ILM
Securing data and information is critical
Managing emails effectively can improve productivity
Vendor recommendations
The data management industry is set to grow
Strong opportunities for regulatory compliance solutions
Vendors should partner with peers
FSIs need to be educated on best practices
Vendors should protect themselves
Vendors should aim to be regarded and perceived as ‘trusted partners’
Index
List of Figures
Figure 2.1: Emerging regulations in financial services industry
Figure 2.2: Regulations that drove key mandatory spending in 2005
Figure 3.3: MiFID-compliant processes can deliver companies a set of wider business benefits
Figure 4.4: Which do you see as barriers to Reg NMS / MiFID compliance?
Figure 5.5: Regulations that drove key mandatory spending in 2005
Figure 5.6: Basel II overview
Figure 5.7: Regulatory compliance IT spend (Europe) 2005 - 2009
Figure 5.8: Regulatory compliance IT spend (North America) 2005 - 2009
Figure 6.9: Regulatory reporting and compliance process
Figure 7.10: Integrating disparate technologies into compliance framework
Figure 7.11: Regulations that are driving the adoption of data management policies and procedures
Figure 7.12: Simplified ILM system design
List of Tables
Table 2.1: Regulatory compliance IT spend (Europe) 2005-2009
Table 2.2: Regulatory compliance IT spend (North America) 2005 - 2009
Table 2.3: Summaries of key laws and regulations
Table 2.4: Summary of new regulations
Table 4.5: Reg NMS vs MiFID IT Spend, 2005-2009
Table 5.6: European Basel II IT Spend 2005-2009, by type of risk
Table 5.7: North American Basel II IT Spend 2005-2009, by type of risk
Table 7.8: Deutsche Bank and dbClient
AbstractAs the number of laws and regulations increase, the cost and complexity for compliance has grown and will carry on for the foreseeable future as a second wave of regulatory activity takes place. Consequently, banks across the globe are increasing their search for effective enterprise risk management initiatives and solutions, in order to transform these regulatory burdens into competitive advantages.
The Future of Regulatory Compliance is a new management report that provides in-depth analysis of the pending regulations - including Markets in Financial Instruments Directive (MiFID) and Regulation National Market System (Reg NMS) - and the impact they will have on financial services institutions (FSIs) in Europe and the US. It reveals technology issues FSIs need to overcome and demonstrates how IT providers can help them through developing best practices and technology solutions to meet the requirements of new laws and regulations. This report also investigates ‘compliance fatigue’ and examines the continuing importance of past regulations - such as SOX - in IT budgetary considerations.
Gain invaluable knowledge, plan ahead and create a competitive advantage, using the detailed analysis and recommendations in this new report.
Some key findings in this report...
• SOX and the Patriot Act are leading the adoption of data management policies and procedures, but MiFID and Reg NMS will drive the need for data management initiatives throughout 2007, as the sense of urgency and importance increases.
• Some of the larger banks have already begun shifting more towards holistic compliance, which provides ways for FSIs to use their existing technology for more than one compliance initiative.
• One of the results of this second wave of legislation is that vast amounts of data will have to be stored and, therefore, firms will have to significantly update their data warehouses.
• This second wave of regulations is motivating the industry to develop enterprise-wide risk management solutions in order to handle the complexities of such legislature, which will lead to greater centralization of risk management and compliance management within organizations.
• Spending on first wave regulations (such as AML, SOX and Basel II) will remain constant or fall in relation to a second wave of regulations (such as MiFID and Reg NMS).
This new report will provide you with...
• Definitions of the major laws and regulations affecting FSIs.
• In-depth explanations of the second wave of regulations (MiFID and Reg NMS) and their market impact.
• Forecasts for IT spending on regulatory compliance from 2005 up to 2009.
• Predictions of whether the second wave of regulations will dominate IT spending more than the first wave of regulations (including SOX, Basel II etc.).
• Analysis of the strengths, weaknesses and IT opportunities of the new regulations.
• Insight into FSIs’ responses to the new regulations.
• Intelligence on market trends, such as the growth in algorithmic trading driven by regulations.
Some key questions answered in this report...
• What is MiFID and how will it affect financial services institutions?
• Where are the IT opportunities in the second wave of new regulations?
• What policies and best practices should FSIs adopt?
• How will regulatory compliance affect IT spending?
• Has the first wave of regulations passed or is it still having an impact on IT spending?
• What are the barriers to compliance with this second wave of regulations?
• Which technologies can help ease regulatory compliance?
• What is Reg NMS and how will it affect FSIs?
Some hot issues covered in this report...
• MiFID - how it will significantly alter financial services regulation within EU member states, how firms operate their businesses and the way they interact with their customers.
• Reg NMS - how it will modernize the regulations governing the US equity markets to better address current market conditions.
• Market consolidation - how firms will compete for a position ahead of the MiFID and Reg NMS implementation dates.
• How compliance can be used as a competitive edge - banks will benefit from increased productivity, lower operational cost, better risk management and an adaptable compliance system.
• Information lifecycle management - and how compliance will be a key driver for ILM initiatives.
Top 5 reasons to order this report today...
• Understand the complex market conditions financial services institutions operate in.
• Discover FSIs’ pain points and emerging markets.
• Clearly identify your value proposition and gain a headstart over your competitors.
• Tailor product offering strategies as no vendor can provide an integrated solution to meet an organization’s compliance requirements.
• Recognize potential alliances or acquisitions, as market consolidation is inevitable.
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