Under the new European Market Infrastructure Regulations (EMIR) both counterparties involved in a trade are required to report their side of the transaction to a Trade Repository (TR). While financial counterparties and large organisations are able to meet these requirements themselves, smaller operations and individuals may not have the resources to invest in the necessary infrastructure. As a result, many of them are choosing to delegate their reporting responsibilities.
In response to this, a global bank has recognised an opening in the market to offer this delegated reporting service to its clients. It has engaged Brickendon Consulting to manage the delivery and implementation of the client offering.
The Challenges
- Legal: The technology behind the system needs to be built to take into account differing legal requirements in different jurisdictions. This encompasses both regulatory and confidentiality requirements
- Reputational: Regulation is a high-profile issue and non-compliance is not an option. Clients expect the bank to deliver a functioning and reliable product. The bank is responsible for the Clients’ regulatory obligations
- Relationship management: Institutional and commercial clients have different operating models. A solution that meets the needs of a variety of institutions is required to ensure continued good relationships and revenue protection
- Reference data risks: Client data is notoriously difficult to perfect. Data ownership, stewardship and cleansing are required to ensure the product functions correctly
- Balancing operational and delivery risk: Given the fixed time-frames for compliance, a balance needs to be struck between operational risk of the finished product and delivery risk of the project. Automating manual processes decreases operational risk but increases delivery risk
The Brickendon Solution
- To manage end-to-end delivery of the client-facing product
- To leverage as much of the existing technology for self-reporting as possible, incorporating existing client data feeds, reporting engines and data management tools
- To utilise resources efficiently through phased delivery:
Release 1: Address the core regulatory issues by providing the client with a functioning interface which allows them to be regulatory compliant
Release 2: Enhance the first delivery by removing manual processes and reducing operational risk to provide a higher level of assurance
Release 3: Improve the client interface and meet subsequent regulatory deadlines.
Client Benefits
Brickendon Consulting has driven the project from business case to delivery. Our end-to-end management and experience of delivering client-facing products ensures relative prioritisation of requirements between:
- Regulator and internal compliance
- Operational risk mitigation
- User experience
- Technology maintainability
The delivery is conducted against fixed regulatory timescales and ensures a product that:
- Protects revenue
- Enhances the bank’s relationship with their clients
- Benefits associated programs through infrastructure upgrades across shared services
- Provides a foundation for delivering web-based, post-trade client engagement
