How to Cope With Successive Waves of Regulation in Europe
London Summit is coming. With only a few days to the show, we keep sharing our speakers’ insight. Mark Kelly is one of the industry’s more experienced compliance specialists and Director at Abide Financial, whose acquisition by ICAP attest to the importance regulatory issues have in the market right now. Kelly outlines his views on the upcoming regulatory state in Europe.
What is your position and what does your role entail?
I am the Director of Professional Services for Abide Financial Limited, an Approved Reporting Mechanism (ARM) for MiFID reporting which also provides an added-value hub for submission of EMIR reports.
Abide Financial has now been acquired to form part of the ICAP post trade services offering, alongside Traiana, Tri-Optima and others. My role is the provision of regulatory reporting consultancy services, both to Abide reporting clients and those who use other reporting routes. It also entails monitoring the regulatory landscape to assist in the preparation of Abide’s offerings for future reporting requirements.
What was the single most important event or development that the market has seen in 2016?
My view is somewhat blinkered by my focus on the regulatory reporting arena, but here as in many other sectors the Brexit vote stimulated much discussion. ARMs registered under one European regulator will have the ability under MiFID 2 to passport their services into other European countries.
Whether UK ARMs will retain this entitlement will depend completely on the Brexit negotiations affecting financial services – similarly the EMIR regulation calls for Trade Repositories to be based in an EU country. Currently a majority of authorized TRs and two candidates to be TRs, including Abide, have bases in the UK.
Retail FX has suffered in recent years
We will continue to monitor the situation and take all necessary steps to maintain our continuity of service to our growing client base in continental Europe.
What are the biggest challenges that the FX trading community is facing? How do they affect your field?
Retail FX has suffered in recent years as it changed from being one of the most lightly regulated sectors to one, which is the focus of significant regulatory scrutiny. Given the lightweight support infrastructure of many smaller brokerages, we have seen both resistance and inability to cope with successive waves of regulation.
External advisors are not always speaking with one voice, especially when discussing post trade transparency
There is a strong demand is for consolidated regulatory reporting and given the limited harmonization across reporting regulations, this demand will be met by third-party vendor solutions such as that being developed by Abide.
What is the main message you’d like to convey to London Summit delegates?
All firms will benefit from taking the time to gain familiarity with the underlying regulatory documents, rather than being entirely dependent upon external advisors. Our experience has been that external advisors are not always speaking with one voice, especially when discussing post trade transparency and the Systematic Internaliser regime, which will come in under MiFID 2.
Firms should try to be sufficiently aware of the concepts being discussed to ask the hard questions of those who are advising them.