16 May 2012
CAS-WG - Regulation
Chair: Kiri Self CEO - TRG Post-Trade Services
Rapporteur; Darren Pearson, Principal Consultant, TRG Post-Trade Services
- Introduction by KS - Welcomed attendees to the first Regulation subject-group meeting.
- Thanks were expressed to SNR Denton for hosting the event.
- KS reiterated key messages from CAS WG launch meeting in February 2012
Meeting scope & objective
- To discuss & agree 3 actionable items to bring to the forthcoming initial plenary session on Wednesday 30 May, 2 -5pm at The London Stock Exchange, 10 Paternoster Square, EC4M 7LS. Register Here
- KS opened the floor for suggested discussion points & actionable items for the initial plenary session.
- The following is a list of issues & questions raised & discussed:
- MiFID or EMIR - The floor expressed the view that actionable items in this group would be betterserved by being time-line based per the roll-out of new regulations so; whichever regulation is due for introduction to the market first should be the focus of the group's discussions and actions.
- CCP Clearing - Valuations & Margin - The floor questioned which entity in the chain is to decide the 'official' mark for collateral calculations. This was raised as any disagreement has high-potential to delay the agreement-process with knock-on effects to downstream operational processes & therefore an increase in operational risk.
- It was agreed that collateral is a subject which needs to 'live' in both the Regulations and Market Infrastructure groups due to the clear cross-over/impact between process & regulation.
- CSD Regulations - It was felt that further clarity is needed in this area. In addition, it was expressed that the impact to retail banking should be included per interest from the floor.
- Legal Entity Identifiers (LEI) - the floor agreed that this subject should sit firmly within the Standards WG.
- Dodd-Frank - It was felt that further & deeper assessment of the impact of these regulations is required to assess the on-the-ground impact to firms & specifically, operational work-flows. It was acknowledged that there is wide-scope which can have impact to any firm's BAU regardless of where they sit in the market.
- Trade Repositories - The security of data reported was raised as a concern.
- Deciphering regulations vs. the impact to real-world BAU was raised as a concern. This was further acknowledged by a representative from an industry think-tank per feedback from clients
- Regulatory Arbitrage - It was mentioned that there are cross-border inconsistencies so likely to be winners & losers.
- The FSA split - What will be the impact to the market?
Initial actionable items for the subject-groups initial plenary meeting:
1/ MiFID III regulations shall be the groups focus with all discussions & agreed-actions time-lined per the rollout of the relevant regulation per the immediate impact to business.
2/ Basle III & the impact to the collateral-process.
3/ The break-up up the FSA (Financial Services Authority) and the impact of this change.
Other info: Proposals for Chair, Co-Chair or Rapporteur (Notary) will be announced at the forthcoming plenary session, Wednesday 30 May, 2 -5pm at The London Stock Exchange, 10 Paternoster Square, EC4M 7LS. Register Here
This & other CAS WG subject-groups were created to gather discuss & agree proposals on wider-industry concerns. With this mind, the full-suite of subject-groups is as follows: Risk, Regulation, Standards & Market-Infrastructure
Kiri Self - CEO - Post-Trade Services, The Realization Group
Darren Pearson - Principal Consultant - Post-Trade Services, The Realization Group
The Regulation Subject Group is focused upon:
- Understanding new regulation, the impacts and cross-border inconsistencies
- Basel III and the treatment of collateral
- The European Markets Infrastructure Regulation (EMIR) and how it impacts both Over-the-Counter (OTC) Central Counterparty (CCP) clearing and Central Securities Depositories (CSD) regulation
- The Markets in Financial Instruments Directive revision (MiFID II) and its impact on internal infrastructures and the market at large
- The Financial Services Authority (FSA) break-up and how the new Bank of England regulator will change the City
- Dodd-Frank’s impact upon OTC derivatives CCP clearing
- Trade Repositories
The Group has Kiri Self of the Realisation Group as Acting Chair, and is open to nomination for this position.