Trustee and Fiduciary Services Global Asset Management Industry Insights

Prime, Futures and Securities Services 14 REGULATORY CHANGE MANAGEMENT PRIORITIES Regulatory change is a fact of life. For every market failure — be it sub-prime, LIBOR or Madoff — there are a new set of rules and regulations for implementation to try and ensure history doesn’t repeat itself. So we asked where the industry thinks it needs the most dedicated resources. Following regulatory changes since the financial crisis, regulators have been collecting more and more information. So it isn’t surprising to see that regulatory reporting is where 39% of respondents indicate firms will focus resources. Elsewhere, the repercussions of the LIBOR scandal features highly, with 29% of respondents indicating there is need for dedicated resources to implement the change to risk-free rates, and a further 18% of respondents identified the implementation of liquidity risk management processes as an area in need of firm resources. Which key regulatory change project will require the most dedicated resource for your firm? Q7 18 % Liquidity risk management 29 % LIBOR transition 6 % Initial margin for uncleared OTC derivatives 2 % Other 6 % Securities financing transaction reporting 39 % Regulatory reporting We were surprised that SFTR reporting was flagged as a key regulatory change project by only 6% of respondents, but feel this is perhaps diluted in the near term by the number of other competing priorities for resources or is collapsed already into the broader regulatory reporting category. The deadlines for SFTR reporting to begin are 11 April 2020 for credit institutions and investment firms and 11 October 2020 for other financial counterparties, including AIFs and UCITS. Given the complexity of the SFTR reporting regime, regulators have recently said that if work has not yet begun, then now is the time to get ready.