Best Practices in Sellside Regulation Implementation

How Regulators are Crafting the Self-regulating Bank

GreySpark Partners presents a report that provides investment banks with guidance on how to build a forward-looking, self-regulating sellside institution that has the flexibility to adjust to ongoing regulatory demands and the resilience to remain competitive within the industry. The financial crisis has dramatically reshaped the regulatory landscape, precipitating a significant change in the attitudes and approaches toward regulation for the regulatory bodies within the EU and the US, the largest banks in those jurisdictions and their clients.

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The result of this recasting of the regulatory agenda is the creation of a new narrative in which a primarily reactive, rules-based approach to compliance is being replaced with a more proactive, principles-based approach. In 2017, financial markets risk management regulations are less based on stringent adherence to ratios and numbers; rather, regulators have bequeathed a certain degree of autonomy to the banks in an attempt to motivate them to become increasingly forward-thinking and proactive in their approaches to regulatory implementation and compliance. As a result of this shift, GreySpark Partners believes that there are now two remits that have emerged as a consequence of the more proactive, flexible approach to regulation:

  • an explicit mandate that internal and external sellside market-, trade- and client-derived data be made available to regulators and to the entirety of the public global financial markets community; and
  • an implicit mandate that technology solutions be utilised to incentivise new levels of transparency.

This report examines how this shift in regulatory approach from reactive compliance mandates to proactive ones has intensified efforts by a variety of markets participants to pursue the electronification and digitalisation of business and trading models.

Best Practices in Sellside Regulation Implementation – Table of Contents

  • 1.0 Mapping the Shift Away from Reactive Sellside Regulation
    • 1.1 The Implicit Mandate: A Liberalisation & Democratisation of Internal and External Sellside Data
    • 1.2 The Explicit Mandate: The Utilisation of Technology Solutions to Incentivise Transparency
    • 1.3 The Effect of Proactive Regulatory Change on Sellside Client Demands
  • 2.0 Creating a New Banking Culture from the Inside Out
    • 2.1 The Creation of the Self-Regulating Bank
    • 2.2 A Case Study: Credit Suisse & UBS – Differing Approaches to Regulatory Adaptation
    • 2.3 A Case Study: First-mover vs. Second-mover Regulatory Advantage
  • 3.0 Preparing for the Future: A Torrent of New Regulations
    • 3.1 Augmenting the Altered Sellside Business Model
    • 3.2 Creating a Forward-Facing, Self-Regulating Bank
  • 4.0 Appendices
    • 4.1 Glossary of Terms
    • 4.2 Table of Figures