If there was one key takeaway from FinovateEurope in London this February, it was that the vast majority of fintech firms have changed their approach toward working with financial institutions and, for that matter, larger incumbent vendors. The focus is now less on “disruption” (whatever that means) and more on partnership. The biggest buzzword/concept of the event therefore appeared to be “white labelling”—taking these startup vendors’ tech and putting your own brand on it.
As European Market Infrastructure Regulation (EMIR) requirements have gradually come into force this year (with limited success), regulators have stressed that firms' compliance will be judged on a "best efforts" basis. But what does this really mean, and more importantly, how will it impact financial penalties?
The industry has been debating the topic of reducing the equities settlement cycle from trade date plus three days (T+3) to either T+2 or T+1 for over a decade. Europe has finally bitten the bullet and enshrined the move to T+2 via regulation, but does that mean we'll see the U.S. market follow suit? If so, it could be an unwelcome and challenging move for some market participants, despite the potential risk management benefits.
Commodity Futures Trading Commission (CFTC) commissioner Scott O'Malia's admission that the regulator needs to go back to the drawing board in terms of defining OTC derivatives reporting requirements was no surprise to anyone. The CFTC has been struggling for some time with an inability to crunch the data it has been collecting from swaps market participants over the last year (every so often publicly complaining about the lack of technology it has to carry out its oversight duties).
Virginie O’Shea is a research director with Aite Group, heading up the Institutional Securities & Investments practice and covering data management, collateral management, legal entity onboarding, and post-trade technology. She brings to the firm more than 13 years of experience in tracking financial technology developments in the capital markets sector, with a particular focus on regulatory developments and standards.