Forefront Communications

FinOps Report: Regulatory Ops 2020: Handling Tower of Acronyms

Alexandra Hamer

Alexandra Hamer

Peter Gargone, chief executive of client n-Tier, comments on 2020 regulatory operations.

Compliance, operations, and IT managers will be teaming up in newly created regulatory operations departments to do data aggregation, contract renegotiation and relationship management in 2020 as they handle a slew of new regulations commonly known by their acronyms or numbers.

A telephone survey conducted over the past month by y FinOps Report ( of 100 C-level compliance, operations and IT managers from buy and sell-side firms in the US and Europe found that the US’ amended Rule 606 and new CAT top the list of expected pain points in 2020 for US firms. European-headquartered firms are far more worried about SFTR and CSDR. Replacement of LIBOR as a benchmark and rgeulatory requirements for initial margin for uncleared derivative transactions will stress out fund managers, banks and brokers across both sides of the pond.

In many cases financial firms have already revamped their siloed regulatory reporting departments into new centralized regulatory operations units comprised of compliance, operations and IT managers to sort through the data and workflow challenges of meeting the new requirements. Back-office folks will no longer have to do all the heavy lifting on their own. Three-quarters of the 100 executives contacted by FinOps Report say their firms have created the centralized regulatory ops units or are in the process of doing so. Some firms have even appointed dedicated data managers to participate in the new group.

At a minimum, broker-dealers need to include data accuracy and completeness checks as part of their ongoing operations and control processes to ensure the right information flows through the right systems into the CAT report. “The data for CAT reporting must be extracted from a multitude of front, middle and back-office systems,” says Peter Gargone, chief executive of n-Tier, a New York-based software firm focused on data management for regulatory reporting. n-Tier’s platform allows firms to verify they have all of the required records for reporting and accurate data in all of the CAT reporting data fields. That data can be traced to an original internal source if there are any data discrepancies.

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