Last week ESMA updated its Q&As on the following topics:
1. MiFID II investor protection
2. EMIR implementation
3. MiFID II and MiFIR market structure topics
4. MiFID II and MiFIR market transparency topics
These publications require analysis of nearly 5 pages of updated guidelines. Our study shows that it would take a financial institution between 25-46 hours to perform the steps above. The associated cost for consuming this regulatory change would be between £4,000 to £13,000.
For a financial institution to be abreast of these changes, and to maintain their compliance, they would perform the following steps manually:
1. Monitor ESMA’s RSS feeds and website to keep up to date on new regulatory publications.
2. Read the publications to understand the content, what it relates to, and the actions that are required to be taken.
3. Make and maintain a manual record the regulatory change in Excel/Sharepoint.
4. Perform a gap analysis to understand:
- What is required to be changed within the current regulatory compliance implementation
- Actions that are required to be implemented versus current compliance implementation.
5. Understand the timeline and scale of change.
6. Inform accountable business owners or project teams of the regulatory change and actions required.
7. Implement the change whist maintaining the regulatory compliance in other areas that might be linked to this change.
8. Keep an audit trail i.e. track record, version history of the actions and implementations.
9. Management report on the actions and timelines for governance and monitoring.
Using Finreg-E to do the same process would cost between £800 to £2600. That is a reduction of over 80% in time and cost for updating compliance for the same regulatory change.
Finreg-E uses automation and adopts an intelligent data-driven approach to provide one seamless regulatory change and compliance solution. Finreg-E workflows and algorithms are designed and implemented by leading industry experts who have a wealth of experience and expertise in financial regulation and compliance. In Finreg-E you would follow the following workflow:
1. Real-time Regulatory Change Library: Finreg-E’s Regulatory Change Viewer provides you with a one-stop source of all regulatory publications across global sources. Finreg-E’s Regulatory Change Viewer algorithms work in real-time to keep this library up to date. This library is fully searchable, filterable and extensive. It removes the need to monitor email alerts and various website pages to track regulatory publications and copy and paste them to create a manual database of changes to work with.
2. Regulatory Obligations: For each regulatory publication Finreg-E provides a summary of key regulatory obligations. These obligations assist in understanding the key requirements under the publication. For example, ESMA 28th May 2020 updated MiFID Q&A on investor protection, Finreg-E shows compliance obligations concerning:
- Articles 24(7)(b), 24(8) and 24(9) of MiFID II
- Investment firms
- Third parties
- The Investment advice provided on an independent basis
- Portfolio management
- Fees, commissions and benefits paid
3. Rule Mapping to Compliance Policies and Procedures: Finreg-E highlights how regulatory publications are linked to your internal compliance policies and processes e.g. highlighting the need to review current MiFID II compliance inducements and research policies under MiFID investor protection rules. Finreg-E will provide guided instructions, based on your current compliance, on what needs to be reviewed. Hence you spend less time solving the different compliance elements that fit within the published regulatory change.
4. Regulatory Compliance Gaps: Finreg-E highlights how implemented compliance policies are linked to regulatory obligations, and where gaps exist, so that you can quickly identify what needs to be reviewed
5. Compliance workflows: Finreg-E provides you with in-built intuitive streamlined workflows that guide you through the steps required to implement regulatory changes. These workflows are designed by industry experts and are based on years of an established, thought-through and standardised process.
6. Governance and Implementation: Finreg-E keeps an audit trail of the actions performed against a regulatory change so your changes are fully evidenced and audited.
With Finreg-E, the manual process of regulatory change and compliance management are rapidly transformed into an efficient and effective process. Finreg-E allows you to manage change and compliance with precision whilst reducing ambiguity and increasing productivity of the regulatory change management process. Finreg-E makes Financial Regulation Easy!