Sapient Global Markets Survey Reveals Escalating Trade Reporting Costs and Concerns over Maintaining Compliance
July 08 2015 - 10:00AM
Business Wire
Respondents believe current approaches mean
costs will increase by at least a quarter in next two years, lack
the adaptability, scalability and flexibility to meet new
requirements
Sapient Global Markets, a leading global provider of business
technology and consulting services for the capital and commodity
markets, today announced the findings of a new survey examining
industry attitudes towards OTC derivatives trade reporting.
Driven by aggressive compliance timelines, existing technology
and available budgets, market participants have tackled the
regulatory reporting requirements under Dodd Frank and EMIR in a
variety of ways. With these regulations well established, and to
ascertain how the industry has progressed in complying with them,
Sapient Global Markets conducted a survey of buy and sell-side
firms during the International Swaps and Derivatives Association
(ISDA) 2015 AGM.
The overall picture that emerges from the survey is one of an
industry that has invested heavily in in-house systems (72% of
respondents) to meet reporting requirements. However, despite
sizeable investment, firms are struggling to overcome the
complexity and manage the costs of maintaining compliance due to
the implementation of disjointed, siloed approaches to trade
reporting. The significant findings from the survey were:
- The majority of firms, whether using a
vendor solution or in-house application, see costs rising
substantially over the next two years. Of those using in-house
systems, 61% expect costs to rise by a minimum of 25%, with 26%
expecting costs to increase by more than 50%.
- Although the factors for the rise in
costs vary, the primary reasons stated by respondents were;
concerns around maintaining reporting systems, the adaptability of
systems to meet evolving requirements and improving ongoing
compliance.
- The biggest trade reporting challenges
for firms were cited as remaining compliant as rules change (35%),
data quality and data management (27%) and maintaining and updating
existing systems (25%)
“It is apparent from these findings that existing approaches to
trade reporting have created inconsistent processes, resulting in
significant operational, compliance and cost implications,”
commented Randall Orbon, senior vice president at Sapient Global
Markets. “Firms, particularly those that have invested heavily in
internal solutions, now face a fundamental question: can they
afford to continue down this route and remain compliant? They must
also determine whether this approach offers the flexibility and
scalability to accommodate further regulatory change as rules
evolve and new requirements, such as MiFID II, come in to force.
Those decisions need to be made now because the level of ongoing
investment required keeping these systems running is uneconomic for
a function that offers no competitive advantage.”
To download a full copy of the survey results, please visit the
Sapient Global Markets Trade Reporting survey paper.
About Sapient Global Markets:Sapient Global Markets, a
part of Publicis.Sapient, is a leading provider of services to
today’s evolving financial and commodity markets. We provide a full
range of capabilities to help our clients grow and enhance their
businesses, create robust and transparent infrastructure, manage
operating costs, and foster innovation throughout their
organizations. We offer services across Advisory, Analytics,
Technology, and Process, as well as unique methodologies in program
management, technology development, and process outsourcing.
Sapient Global Markets operates in key financial and commodity
centers worldwide, including Boston, Calgary, Chicago, Dusseldorf,
Frankfurt, Houston, London, Los Angeles, Milan, New York,
Singapore, Washington D.C. and Zurich, as well as in large
technology development and operations outsourcing centers in
Bangalore, Delhi, and Noida, India. For more information,
visit www.sapientglobalmarkets.com.
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version on businesswire.com: http://www.businesswire.com/news/home/20150708005246/en/
Sapient Media Contact:Sapient Global MarketsGeoff
Whitehouse, +44 (0) 207 456 6550gwhitehouse@sapient.com
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