In part one of his blog series, Jason Neiss, Senior Product Manager at Confluence explains what he feels is coming next in the European regulatory reporting space.
The 2008 global financial crisis sent shockwaves through the financial community, leaving market participants reeling and forcing many companies to overhaul long-held practices and processes. It also prompted regulators worldwide to consider how gaps in oversight may have contributed to the emergence of this world-altering event.
As a result, the last decade has been marked by a steady increase of systemic risk reporting requirements, designed to provide regulators with much more information useful for protecting investors’ interests. But with the repercussions of the crisis still being felt today, what might the next set of reporting look like?
Continued regulator supervision
Back-office teams in the US have been focused on preparing and implementing processes for Forms N-PORT and N-CEN, key planks of the Securities and Exchange Commission’s moves to enhance transparency and modernize reporting requirements for registered investment companies. Currently there is no European equivalent of these directives, but regulators in the region have made some sweeping changes and more are imminent.
An example is the currently-in-place Undertakings for Collective Investment in Transferable Securities (UCITS) Directives. This is a harmonized regulatory framework of the European Commission that allows mutual funds to trade across all member states. A proposed update (known as UCITS VI) which would have introduced closer regulation of money market funds (amongst other changes), has been shelved for the time being, with regulators examining issues on a case-by-case basis instead of a wholesale overhauling of the UCITS rules.
The European Securities and Markets Authority (ESMA) however has released guidance on templates for its incoming money market funds’ disclosure regime. From Q1 2020, European money market funds – investments regarded as being as safe as bank deposits while still giving a higher yield – will have to provide more information to regulators than they did previously. Confluence is looking forward to supporting clients once the regime is in place.
To read the full article, click here.