June 2018: It’s Not About Winning, It’s About Compliance

Several of this year’s awards recognize initiatives developed in response to regulations, ranging from high-profile legislation such as the revised  Markets in Financial Instruments Directive (Mifid II) and the Securities and Exchange Commission’s “liquidity rule,” to obscure tax rules. But one category you won’t see is Best APA Data Provider, because APAs (Approved Publication Arrangements), which provide transaction reporting services, as mandated under Mifid II, haven’t been doing a great job of making trade data available in ways that adhere to the letter—or even the spirit—of the law. Over recent months, we’ve carried several stories by Risk.net’s Samuel Wilkes on the topic, and in this issue we feature a collaboration between the WatersTechnology team and IDM’s Amelia Axelsen on pan-European regulator the European Securities and Markets Authority’s (Esma’s) recent crackdown on some APAs’ shady practices that fail to make data freely available and accessible.

In a related theme, Jamie Hyman reports on some of the sticky reference data issues that are preventing firms from ironing out some of the wrinkles that still stand between them and full Mifid II compliance. Poor reference data is still blamed for the majority of rejected transaction reports, and in some cases this is because of the complexity of the regulation, but in others, it’s because the data required to support full compliance simply isn’t available. Fixes to these concerns can’t come soon enough for firms struggling to keep their heads above the water as they face a constant rising tide of new regulations.

The lucky individuals tasked with meeting the demands of these rules are increasingly chief data officers (CDOs) rather than traditional compliance professionals, because CDOs should be in a position to access data from across their organizations. And Asia has seen a recent uptick in the number of locally appointed CDOs, reports Wei-Shen Wong—partly in response to regulatory demands, but also because firms realize the value of their data assets and see the opportunity to monetize them. Firms that see their data as changing from being a sunk cost to a profit center need someone who can not only manage data, but also market it.