11/15/2021 | Press release | Distributed by Public on 11/15/2021 05:17
As year-end approaches many firms will draw a sharp intake of breath at their regulatory reporting software spending - compliance costs have increased by 60% since 2008, amounting overall to an 8% tax on firms (Adox Research, Follow the Money 2020). The industry has arrived at a tipping point when it comes to spending on regulatory reporting point solutions across different regimes and trading desks. Reducing the total cost of ownership for regulatory reporting and cultivating intelligent flexibility in order to adapt to future developments have become top priorities.
2021 has seen major deadlines for Consolidated Audit Trail (CAT),Monetary Authority of Singapore (MAS) OTC Derivatives reporting and Securities Financing Transaction Regulation (SFTR) amongst others. Each regulation presents its own unique difficulties - Consolidated Audit Trail reporting, for example, involves such high volumes of orders that even a 1% error rate can have catastrophic consequences in terms of both costs and resources. That's why firms such as this global broker-dealer have pushed so hard to drive their error rates down below 0.01%.
The upcoming year will see regulatory changes including the CFTC rewrite for the Dodd Frank act, updates to EMIR REFIT reporting and a third consultation paper for proposed changes to MIFID II reporting, as well as the CSDR deadline in February 2022. There are also new validations for the aforementioned MAS regulatory reporting just one year after the go-live date, which indicates just how fast things are moving. ISO 20022 is likely to bring further complexity as the new standard is increasingly adopted worldwide. Firms which take a planned, strategic approach to their regulatory reporting now can avoid the last-minute need for expensive tactical point solutions and multiple complex projects both next year and beyond.
Regulators have also indicated that they will be paying closer attention to the quality and accuracy of reporting submissions. Both ESMA and Bank of England have spoken out on this area, with other regulators expected to follow. 2020 also saw National Competent Authorities (NCAs) impose fines of €8.4 million for MiFID II reporting breaches. This increased scrutiny is likely to see costs and workloads increase further as firms grapple with inaccurate or incomplete data and complex systems.
If a strategic approach is the answer to minimising the pain associated with regulatory reporting solutions, what should firms' next course of action be? The simple, cost-effective option is to bring in a regulatory partner with the capability to not only simplify your reporting but also ensure that you have 100% confidence in it. Your partner checklist should include:
To discover how Gresham is reducing regulatory reporting and compliance costs for firms across the globe, contact our team below