The Year of Compliance

In this issue alone, we have hedge funds under pressure and wrestling with technology that will help them increase transparency (see related story, this issue); the UK Financial Services Authority weighing restrictions on "softing" (or "soft-dollaring," as it is called in the US), and the IT implications that a curb of that practice could bring (see related story, this issue); and instant messaging adopters reviewing how to store the technology--not because they have to yet, but because in this regulatory environment, it can’t hurt to be safe (see related story, this issue).

Meanwhile, the financial industry is expected to spend more than $10 billion to comply with the anti-money laundering provisions of the Patriot Act over the next three years. There are a host of anti-money laundering software packages, and in the reference data space, the act is presenting a new point of pain.

In the disaster recovery arena, a draft interagency white paper on "sound practices to strengthen the resilience of the U.S. financial system" is pending final rule publication by the Federal Reserve, the Office of the Comptroller of the Currency, and the Securities and Exchange Commission. It would require firms that play critical roles in the markets to maintain sufficient out-of-region resources and be prepared to recover, at minimum, on the same business day.

As the Sarbanes-Oxley Act aims to increase corporate governance, shareholders will become privy to increased amounts of risk management information. And of course, as long as we are discussing risk, the Basel Accord revisions seem to be a never-ending story.

Meanwhile, storage experts cite the Patriot Act; the Sarbanes-Oxley Act; and the Gramm-Leachy-Bliley Act of 1999 (with a compliance date of May 2003) for protecting consumers’ non-public information; and SEC rule 17a-4 about record retention--as all contributing to massive increases in demand for storage.

So, in short, if compliance is not on everyone’s booth, it should be on everyone’s mind.

Renee Wijnen, Editor