Planning for regulatory change

Today, there’s a different mindset around planning for regulatory reporting versus what we’ve seen in the last decade.

When I think about 2010-2015, any technology that would help firms automate regulatory reporting was welcome. The problem this created was that firms began designing for a specific set of requirements.

Expertise in compliance and regulatory reporting, with respect to jurisdictions, calculations, formatting, and workflows, is now table stakes. To effectively solve for the unknown, firms must have a strong understanding of their underlying data sources, variability, and methods for organizing and utilization. It’s what we refer to as domain awareness. Systems capture trades, transactions, positions, aggregations, accounts to counterparties, brokers, and more to understand data taxonomy. In this context, data is the first-order component, not the regulation.

Once a firm masters its data taxonomy, solving for challenges — such as regulatory reporting — becomes forward thinking and less reactionary. Unified systems that aggregate books, summarize broker and counterparty positions across asset classes, or calculate performance over various keys serve as building blocks for specific needs, such as reconciliation, reporting, tax, and treasury.

An inventory of domain-specific datasets, ready to mix and match, offers a broader set of use cases for data – whether for analytics, to enhance team collaboration, or to collect and report data to regulators. With the right components, thinking strategically about your business with confidence in your data prowess becomes a true differentiator. The daily asks of Form PF reporting underscore the need to shift thinking in the compliance function as market forces move the regulatory barometer with more volatility.

Have a question or need support with your regulatory obligations? Watch our on-demand webinar: Navigating the Evolving Regulatory Environment with Data Governance Solutions.

Sources:

1 SEC Charges Archegos and its Founder with Massive Market Manipulation Scheme, June 2022, U.S. SEC.

2 Form PF, June 12, 2023, Federal Register