UK’s Financial Conduct Authority Seeks Comments on Improving Regulatory Reporting

The Financial Conduct Authority (FCA) has announced that it is seeking views on how technology can make it easier for firms to meet their regulatory reporting requirements and improve the quality of the information they provide. The FCA regularly explores how technology can make regulations more efficient and reduce the regulatory burden on firms. One of the ways they do this is through ‘TechSprints’ that bring together financial services providers, technology companies and subject matter experts to develop solutions to regulatory challenges. In November 2017, the FCA and the Bank of England, held a two-week TechSprint to examine how technology can make the current system of regulatory reporting more accurate, efficient and consistent. All regulated firms submitted data to the FCA based on their financial activities. At the TechSprint, participants successfully developed a ‘proof of concept’ which could make regulatory reporting requirements machine-readable and executable. This means that firms could map the reporting requirements directly to the data that they hold, creating the potential for automated, straight-through processing of regulatory returns. Every year the FCA receives over 500,000 scheduled regulatory reports from firms, as well as additional ad hoc reports. FCA’s Call for Input outlines how this ‘proof of concept’ was developed and asks for views on how the FCA can improve this process. The paper also seeks feedback on some of the broader issues surrounding the role technology can play in regulatory reporting. The Call for Input will close on June 20, 2018. FCA will publish a feedback statement summarizing the views received and the proposed next steps in Summer 2018.

 

UK Cryptocurrency Companies Form Self-Regulatory Body

The UK’s leading cryptocurrency companies have joined together to launch a self-regulatory trade body – CryptoUK – to improve industry standards and engage policy makers on the future of the sector. CryptoUK will work to raise understanding of the sector at a time of significant growth in popularity and call on the government to introduce appropriate regulation to protect consumers and business certainty, allowing the sector to flourish in the UK. CryptoUK has developed a Code of Conduct, the first in the UK, which members must comply with and is intended to improve standards in the industry. The Code, which will evolve and be updated following collaboration with the industry, policy-makers and opinion formers over the coming months, includes: appropriateness checks to ensure that investors are fit and proper to undertake transactions; due diligence checks on platform users to protect against illegal activity; segregating fiat customer from company funds, and to ensuring customer funds are payable upon an insolvency event; ensuring communications with customers is fair, clear and not misleading; proactive disclosure of clear information on pricing, leverage and fees and any associated risks and a requirement on the use of “cold” wallets where appropriate. CryptoUK comprises seven founding members including trading platforms, exchanges, comparison sites, intermediaries, merchants and asset managers.

 

Japan Exchange Group Launches New Clearing for Exchange Traded Derivatives

On February 13, Japan Exchange Group (JPX) launched its new clearing system for exchange traded derivatives, based on Cinnober’s TRADExpress RealTime Clearing and CCP Risk solution. The JPX ETD derivatives market is operated by the Osaka Exchange (OSE) and cleared by the Japan Securities Clearing Corporation (JSCC), both part of JPX. JPX’s new clearing system offers more sophisticated risk, account and position management functions, global standard interfaces and a modern graphical user interface. With the solution, JPX is able to calculate members’ and clients’ risk for ETD in real time. New account types are introduced for individual clients. The new clearing system provides a more transparent omnibus account model, allowing members to report and see client accounts and margin requirement individually. Additionally, new products can be added with very short time thanks to the flexibility of the new clearing system which will enable JPX to grow in their business.

 

SWIFT Launches New Payments Platform in Australia

SWIFT announced the public launch of the New Payments Platform (NPP) in Australia, which changes the way payments are made domestically. The NPP’s financial architecture has been designed and constructed to improve how consumers, businesses and governments transact with one another. The key features of the NPP include: 24/7 instant payments and real-time line-by-line settlement via the Reserve Bank of Australia, PayID – a way to link a financial account with an easy-to-remember identifier such as a mobile phone number, email address or ABN for businesses, and an open access infrastructure that empowers innovation through competition. NPP is a component within SWIFT’s broader global instant payments strategy, which also includes the provision of an instant payment messaging service for the euro area. Launching in November 2018, to coincide with the launch of TARGET Instant Payment Settlement (TIPS), the euro real-time payments service commissioned by the Eurosystem, SWIFT’s new messaging service will allow instant payments to be made in euros across Europe through both TIPS and EBA CLEARING’s RT-1 instant payments system. 

 

Exchange Data International Adds Options Analytics Service

Exchange Data International announced the launch of its new service: Option Analytics. Covering over 10 million options and futures contracts and 10,000 issuers, the Options Analytics service uses daily updates and historical data to provide end-of-day analytics and reference data for U.S and international exchange-listed options on equities, exchange traded funds (ETFs), equity indexes, and futures. 

Singapore Exchange and Bursa Malaysia Plan Trading Link

Singapore Exchange (SGX) announced that it will collaborate with Bursa Malaysia (BM) on jointly developing their capital markets through a stock market trading link. The announcement made by the Monetary Authority of Singapore (MAS) and Securities Commission Malaysia (SC) on the establishment of a BM-SGX trading link. This is the first time that both SGX and BM have come together to establish a network that will enable cross-border clearing and settlement of traded stocks. The joint regulatory supervision and enforcement arrangements by MAS and SC will allow investors to use the trading link with confidence. Each market will continue to be governed by its own listing, trading and clearing rules and regulations.

 

European Commission Launches Blockchain Observatory and Forum

The European Commission launched the EU Blockchain Observatory and Forum with the support of the European Parliament, represented by Jakob von Weizsäcker who’s responsible for the recent report on virtual currencies. The Blockchain Observatory and Forum will highlight key developments of the blockchain technology, promote European actors and reinforce European engagement with multiple stakeholders involved in blockchain activities. Blockchain technologies, which store blocks of information that are distributed across the network, are seen as a major breakthrough, as they bring about high levels of traceability and security in economic transactions online. They are expected to impact digital services and transform business models in a wide range of areas, such as healthcare, insurance, finance, energy, logistics, intellectual property rights management and government services. The European Commission has been funding blockchain projects through the European Union's research programs FP7 and Horizon 2020 since 2013. Up until 2020, it will fund projects that could draw on blockchain technologies for up to €340 million. The European Commission wants to build on the existing initiatives, ensure that they can work across borders, consolidate expertise and address the challenges created by the new paradigms enabled by blockchain (such as disintermediation, trust, security and traceability by design). ConsenSys, a global player now well established in Europe, has been selected as partner to support the Observatory's outreach in Europe.

 

Global Legal Identifier Foundation and SWIFT Partner on Cross-Reference File

The Global Legal Entity Identifier Foundation (GLEIF) has published the first monthly relationship file that matches a Business Identifier Code (BIC) assigned to an organization against its Legal Entity Identifier (LEI). With the launch of this open source file, GLEIF and SWIFT offer a cooperation model that enables market participants to link and cross-reference these entity identifiers free of charge. The BIC-to-LEI relationship file is built upon a mapping process established by SWIFT and certified by GLEIF. It is published on the GLEIF website in CSV format and will be updated on a monthly basis. As of February 2018, more than one million LEIs have been issued to legal entities globally. Of the approximate 130,000 BICs assigned to date, currently some 45,000 pertain to organizations that are legal entities or foreign branches, and therefore qualify for the mapping against LEIs.

 

GMEX Fusion Combines Centralized and Distributed Solutions

GMEX Technologies Ltd (GMEX), a provider of multi-asset exchange and post-trade business and technology solutions announced GMEX Fusion, an integrated centralized and distributed solution set. GMEX Fusion combines the established GMEX centralized technology– currently live in multiple exchanges and post trade venues, such as Hanoi Stock Exchange and Vietnam Securities Depository- with the latest Blockchain technology. Delivering state-of-the-art, hybrid trading and post trade solutions for exchanges, clearing-houses, central securities depositories and electronic warehouse receipts operators, while simultaneously taking advantage of the inherent positive characteristics of both. Fusion has been created to support the latest technology and business challenges impacting the way traditional exchanges are looking to operate, as well as to address the demands from the crypto exchanges and emerging market countries looking to start-up or enhance their exchange ecosystem. GMEX is working with several in each area to enable a technologically advanced multi asset, cost effective and future-proofed solution.

 

Brazil’s B3 Launches Market Closing and Reference Data Service

B3 announced the launch of UP2DATA, a market closing and reference data provision service that will provide early ready-made financial information to customers to facilitate the automation of their processes. "If a particular market closes at 3:00 p.m. in Brazil, for instance, information about it will be readily available soon after that time. Until now, customers had to wait for the entire market to close in order to access data that were known in mid-afternoon," explains Adolpho Bianchi, Information and Technology Products and Services director at B3. UP2DATA provides data on security lists, open positions, trade information, settlement and reference prices, and economic indicators for the Commodities, Interest Rate, Exchange Rate, and Equity markets, among other data.