In an environment of uncertainty driven by unprecedented regulatory change, firms must collaborate on the adoption of standards-based approaches to minimise the total cost of ownership (TCO) of compliance, SWIFT experts say Brussels, 18 July 2011 – Financial firms are currently facing an unprecedented onslaught of new regulation. Add to this the high levels of uncertainty around the exact timing and scope of the forthcoming measures across markets, and it is clear that financial institutions are facing a challenging few years. While there may be no avoiding these new regulations or the uncertainty associated with them, financial firms can take more of their destiny into their own hands. They can do this by supporting industry developed collaborative solutions which address important operational consequences of the regulatory agenda.



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This is a key message of a new white paper from SWIFT entitled Facing the unknown: Building a strategy for regulatory compliance in an uncertain landscape.

The paper makes the case that “we are entering a period of great uncertainty”. “Indeed,” it continues, “the one certainty is that there will be more regulation. This uncertainty is an inevitable consequence of an unprecedented attempt to co-ordinate an ambitious series of regulatory measures across all major markets – impacting everything from the capital structure of banks to the clearing and reporting of derivatives.”

Adopting where possible a collaborative approach to compliance is an important way to take back some control of the situation, the paper argues. Fabian Vandenreydt, Head of Securities and Treasury Markets at SWIFT explains: “Presenting to the regulators, alongside your peers, operational solutions that work for both regulators and for you and your fellow institutions is a better way of moving forward than either just waiting for something to be imposed or burying your head in the sand and hoping it will all go away.”

The SWIFT white paper offers clear guidance on the way forward for financial institutions grappling with regulatory uncertainty. It suggests that firms need to monitor the situation, take a stance on how proactive they will be in shaping the regulation, and make a plan for compliance based on what they do know. It argues that standard, open, flexible solutions are essential to reducing the total cost of ownership (TCO) of compliance efforts – and that there is an opportunity to develop collaborative solutions to minimise the industry-wide operational impact of regulatory change.

One activity set to be particularly affected by new regulation is clearing, and this implies changes for central counterparties (CCPs). Commenting in the white paper, Diana Chan, CEO of EuroCCP, says: “Regulators want CCPs to clear more, and at the same time, are raising the bar significantly on all aspects of their operation. The cost of compliance with new regulatory requirements will be significant. Collaboration within the clearing industry to develop standards to face these new challenges is more important than ever before. Standardisation of message formats, communication protocol and operational procedures among connected parties reduces long-term costs and operational risks for everyone. The sooner we accomplish this, the better. We must not miss the opportunity to do it right from the start.”

Fabian Vandenreydt concludes: “The uncertainty related to upcoming changes in regulation presents a common challenge to the industry as a whole. Only through collaboration will we reduce our costs and SWIFT is ideally placed and ready to help our community tackle this challenge.”

Additional information
Join a panel of industry experts to discuss the operational challenges posed by new regulation. SWIFT and A-Team Group will present a special webinar entitled “Facing the Unknown: Building a strategy for regulatory compliance in an uncertain landscape”. The 45-minute webinar will be held on 4 August 2011 at 16.00 CET / 10.00 am EDT. Audience questions are encouraged – click here to register today.
The SWIFT white paper will be available for download at www.swift.com/products/regulation.

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About SWIFT SWIFT is a member-owned cooperative that provides the communications platform, products and services to connect more than 9,500 banking organisations, securities institutions and corporate customers in 209 countries. SWIFT enables its users to exchange automated, standardised financial information securely and reliably, thereby lowering costs, reducing operational risk and eliminating operational inefficiencies. SWIFT also brings the financial community together to work collaboratively to shape market practice, define standards and debate issues of mutual interest.

For more information, please refer to www.swift.com or contact our PR agency:

Contact SWIFT
Cameron Heffernan
+32 2 655 3205
cameron.heffernan@swift.com
Contact presse France
Justine Gilles
Fleishman-Hillard Paris
+33 (0)1 70 69 04 13
justine.gilles@fleishmaneurope.com


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