Risk.net’s Post

“I see the TPRM world entering a KYC-like framework in terms of knowing suppliers…, that’s the only way” – Jeff Simmons, former CRO at MUFG Securities Europe. https://hubs.li/Q02CqGkb0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02CqGFC0

“I see the TPRM world entering a KYC-like framework in terms of knowing suppliers…, that’s the only way” – Jeff Simmons, former CRO at MUFG Securities Europe. https://hubs.li/Q02CqNT10 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02CqND30

Review of KYC validation by KRAs under Risk Management Framework. Simplified provisions for ease of client transactions.: SEBI issued a circular to intermediaries, stock exchanges, and industry associations regarding the review of validation of KYC records by KRAs under the Risk Management Framework. The circular simplifies the risk management framework by specifying attributes for verification by KRAs, including PAN, name, and address. Validated records are those where all attributes are verified with official databases and PAN-Aadhaar linkage is confirmed. Exchanges and intermediaries must update their systems by May 31, 2024. The circular is issued u/s 11(1) of the SEBI Act, 1992 and Regulation 17 of the SEBI{KYC Registration Agency}Regulations, 2011 to protect investor interests and regulate securities markets. http://dlvr.it/T7N3HR #SEBI #KYC #RiskManagement #KRAs #Circular

The FMDQ ETD market facilitates risk management by enabling FMDQ Derivatives Trading Members to trade derivatives for both their own accounts and their clients' accounts, offering protection against potential losses for all involved parties. For more information about the FMDQ ETD market, please visit our website on https://lnkd.in/giUbNXja or contact our Derivatives Business Group at dbg@fmdqgroup.com #FMDQExchangeTradedDerivativesMarket #TransformingRisktoCertainty #RiskManagement #FMDQGroup #FMDQExchange

2 common myths dispelled by the #FCA's £13 million unauthorised trading fine: 💠 branches are subject to lesser FCA scrutiny; and 💠 public harm is a prerequisite to enforcement and fines (the firm suffered £58 million in unwinding losses, but the trades had “no market impact” and no effect on clients). Additionally, a few insights into FCA expectations around risk controls 🔶 Red flags for circumvention risk 🔹 junior front-office access to risk controls 🔹 arbitrary net position triggers for reporting or investigation 🔹 front-office knowledge of risk controls and de minimis thresholds 🔹 front-office ability to “select” who reconciles their book by reaching-out to specific staff directly – in particular, junior risk staff 🔹 over-reliance on P&L and EOD reconciliations to monitor complex books 🔶 Red flags for governance risk 🔹 incomplete remediation projects, or projects lacking adequate ToR, resources, skillsets, methodology or stakeholder input 🔹 committees failing to meet in accordance with their ToR 🔹 unclear (or non-existent) escalation channels and resolution timeframes for reconciliations and investigations 🔹 recording issues collectively, rather than individually 🔹 not monitoring reconciliation trends (70% of the desk’s reconciliations concerned one trader) #compliance #controls #marketabuse #circumvention

Exciting times ahead for Common Securitization Solutions as they leverage their data and risk management expertise to enhance services for the GSEs. *Watch out for potential disruptions in the securitization market as CSS makes bold moves with innovative solutions. *This strategic shift may shake up the industry and present new opportunities for investors and stakeholders to capitalize on. *Stay tuned as CSS navigates the complexities of the financial landscape and sets the stage for a dynamic evolution in securitization services.

Is Custody FX the Secret Weapon in Risk Management? How do custody FX services play a pivotal role in mitigating financial risks for institutional clients? Currency Exposure Mitigation: Custody FX helps hedge against currency fluctuations during cross-border transactions, protecting portfolio value. Operational Risk Reduction: By automating currency conversions and settlement processes, custody services minimize human error and transaction failures. Regulatory Compliance Assurance: Providers ensure adherence to complex local and international financial regulations, reducing legal and reputational risks. #TradeFloor #dataanalytics #riskmanagement #tradingstrategies #marketresearch #investmentmanagement #assetmanagement #fintech #regulatorycompliance #portfoliomanagement #derivatives #marketanalysis #financialtechnology #quantitativeanalysis #investmentstrategy #businessintelligence #financialinnovation #economicanalysis #hedgefunds #privateequity #TradingSystems #datascience #riskanalysis #financialdata

The implementation of a new business register holds profound significance in fostering a robust and transparent financial ecosystem. Such a register serves as a cornerstone for regulatory compliance, risk management, and market surveillance, thereby fortifying the integrity and stability of financial markets. By centralizing comprehensive information on all registered businesses, enabling them to effectively monitor activities, detect potential risks, and enforce regulatory standards. #regtech #fintech #compliance #financialservices #ifas #mortgagebrokers

Thank you to Risk.net for hosting such an informed discussion. Two key takeaways from Aptonomy: improvements are needed in consistency and regulatory oversight: 1)    Consistency – collect data on the same basis that you use to make decisions. For anything counterparty related, that requires aggregating trades by the legal agreement they belong to and the collateral that covers them. Duplicative and inconsistent processes linking trades to agreements within a firm means they can’t be sure of their own numbers which slows down decision-making in taking risk down, laying risk off and trade reporting 2)    Regulatory oversight – with the critical data elements of trade reporting already harmonised, single aggregation keys would mean that in the same way that a portfolio manager controls and limits the bilateral risks of the single institution, regulators would have the ability to get eyes on systemic and concentrated risks that could impact the financial markets and the wider economy If you would like to discuss Aptonomy’s thinking in this area when responding to the BCBS consultation due on August 28th, please connect directly through hello@aptonomy.io. Additional thanks to Luke Clancy, Matthias Arnsdorf, Abraham M. Izquierdo, Allan Cowan and Kanwardeep Ahluwalia.

New U.S. Commodity Futures Trading Commission proposed regulations under the Commodity Exchange Act will be of particular interest to futures commission merchants and their customers, including institutional investors and their investment managers. In the latest post in his BR Derivatives Report series, my colleague Andrew Cross notes that the proposed rule allows each separate account to be treated as a distinct account from all other accounts of the same customer for purposes of a futures commission merchant’s capital, risk management, and segregation calculations. #derivatives #cftc #cea #fcm #investmentmanagement