February 14, 2025 • 37 mins
In this special live recording, hosted by John Kernan, Head, REGIS-TR UK, SIX, John interviews our special guests about the impact of EMIR Refit and the the rollout, delivery and data quality improvements from a market participant perspective. With hands-on expert insights from Felicity Howley (Product Owner Regulatory Reporting, ABN AMRO CLEARING), Roberto Bermejo (Secondary Markets Department, Deputy Director – Post-trading division, CNMV), Tim Hartley (Director - EMIR Reporting, Kaizen) and Paula López (Head Client Services, REGIS-TR, SIX)
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Speaker 1 (00:08):
This podcast is brought to you by RegistryR,
which is a member of the SixGroup, and features members of
the RegistryR team and specialguests expressing their personal
opinions, not the opinions ofRegistryR as an organization.
There is no representation madeas to the accuracy or
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(00:28):
Hello and welcome back to theRegistry Hour Roundup podcast.
Yes, it's February and we areback in the virtual studio, but
not for long, because in thisshow we're doing something
slightly different.
We are bringing you a show thatwas recorded live a few weeks
back in Madrid at the Palacio dela Balsas, the Madrid Stock
(00:50):
Exchange for those of you whodon't speak Spanish and this was
hosted by John Kernan, regularco-host here on the show, the
man who used to put the canaryin the wharf and now looks after
St Mary's Axe, the CEO ofRegistry UK.
And John was joined by PaoloLopez, the nicest and most
(01:11):
efficient person in theorganisation, also the head of
client services at Registry 6.
And they have three veryspecial guests Felicity Howley,
who is the product owner forregulatory reporting at ABN Amru
Clearing Roberto Banejo, whoworks the product owner for
regulatory reporting at ABN AmruClearing Roberto Benejo, who
(01:33):
works in the secondary marketsdepartment he's the deputy
director there in thepost-trading division of CNMV
and of course, tim Hartley, anold friend of the show, who is
the director of reporting atKaizen, and together they have a
very full and candid discussionabout the challenges posed by
refit, how the implementationwent and how the rollout and use
(01:54):
of that data is progressing.
So, without further ado, let'stravel to Madrid, and here's
John Kernan to Madrid.
Speaker 2 (02:13):
And here's John Kernan.
Good morning everyone.
The last time I stood on thisstage, two years ago, I was 10
kilos heavier than I am now.
God willing, when I come backin two years, I'll probably put
it all back on again.
Refit is what the tailor does tomy trousers Adjusts them a
couple of centimetres here andthere, quickly, cheaply, easily
(02:34):
done.
These are not adjectives we'vecome to associate with emir
refit.
Whilst it may seem a bitpedantic arguing about semantics
, I think it's important toacknowledge the scale of refit.
Whilst it may seem a bitpedantic arguing about semantics
, I think it's important toacknowledge the scale of refit,
or rebuild, as I'm suggestinghere, and the impact on market
participants, regulators andtrade repositories.
(02:57):
As we explore some of this withour panel of esteemed experts,
we'll examine whether the painof rebuild, whether the pain of
the rebuild, has resulted in amore precise reporting standards
and better data quality.
So, without further ado, I willintroduce my esteemed
(03:18):
panellists, starting withFelicity.
Felicity is the product ownerof regulatory reporting at ABN
AMRO Clearing Bank.
She's responsible for both EMIRand SFTR.
She started out in clearing 18years ago as a developer and
transitioned into a businessanalyst.
In 2021, she joined RegReporting as a business analyst,
(03:39):
where she became product ownerjust in time to deliver Refit,
where she became product ownerjust in time to deliver refit
Outside of work.
She's the mother of two teenagedaughters and as someone who
also has two teenage daughters,I suspect it's a bigger
challenge than refit Tim.
Tim has 15 years in theindustry.
He's a specialist in emailreporting with a deep
(04:03):
understanding of all the tradeand position reporting lifecycle
.
Tim has assisted and advised abroad range of firms, including
hedge funds, asset managers,brokers and non-financial
institutions, to enable them tomeet their regulatory reporting
requirements, implementfit-for-purpose and best
practice approaches, as well asavoid regulatory scrutiny and
(04:25):
enforcement action.
Prior to Kaizen, tim was anEMEA and SFTR reporting
specialist for Kroll, and he'salso spent five years leading
and developing this, the CMEtrade repulsory, as a global
head of client services.
And now on to Roberto.
Roberto is the deputy Directorof the Post-Trading Area in
(04:45):
charge of supervision of EMEAand SFTR reporting, ccps and
CSDs.
Roberto joined the CNMV in 2018and since then he's been
involved in the supervision ofthe CCP data quality of various
EU reporting obligations and hasbeen the CNMV's representative
(05:06):
in the College of Supervisors.
Roberto participates in EUpolicy development regarding
post-trading.
He's also supervised internalmodels for CCPs and investment
firms.
Previously, roberto worked forentities participating in
financial markets and for globaladvisory firms.
He has extensive experience inrisk management, financial
(05:28):
instrument valuation andcorporate finance.
And, last but not least, paolaPaola's our head of client
services, and I've had the greatpleasure of working with her
for the last 10 years at Registr.
Prior to assuming the role ofhead, paola was the deputy head
and, given that regulatoryreporting is so technical and
(05:50):
niche, it's my view that servicesupport is a really challenging
place to be.
So, without further ado, let'sget into the panel.
So first of all, I'd like tounderstand better the challenges
with the implementation ofReefage.
How did you and all yourparticipants navigate through
(06:11):
this change process and how arethings now, six months after the
EU reporting start date and sixweeks after the UK reporting
start date?
If I may start with you,felicity, please.
Speaker 3 (06:24):
Yep, can you hear me?
Ok?
Okay, yes, I think so.
Yeah, so our journey for refitstarted in 2022 and we started
looking at the preliminarydocumentation that was available
by ESMA and we needed to get anunderstanding of what the
impact was for ABIA and ammoclearing, notaring not just for
regulatory reporting but alsofor the other departments within
(06:45):
the organisation.
And we realised that the impactwas substantial and we had
discussions actually with Regis,also with some other CCPs, to
understand what they were goingto do with their implementation,
and basically, everybody wasrebuilding from scratch and we
were doing the exact same.
And you have a very short spaceof time to do that.
(07:06):
There's nothing like aregulatory deadline to put the
pressure on.
So we realized, in order to beable to deliver on time, we had
to basically double the size ofthe team.
So we started hiring newmembers of the team, and that's
also a challenge in itself.
You have a team of experts andit's it's very difficult to find
(07:28):
expertise on the market whounderstands clearing, who
understands regulatory and whounderstands the it.
So, yeah, you're trying to makeand get a balance, and that
that was also very difficult.
Um, but yeah, we, we went outbasically on a roadshow to the
rest of the organisation andshared the impact for the other
teams.
So we knew we needed to get newfields from them.
(07:51):
But the most difficult part waswe didn't know how those fields
were going to come in.
So that was actually one of thebiggest challenges for us was
getting the information from theCCPs.
So we were building literallyfrom the inside out, building
the systems that we.
So we were building literallyfrom the inside out, building
the systems that we knew.
We had to deliver the reportsto Regis and we needed to know
(08:13):
how we were actually going toget the information in.
And we have I don't know howmany CCPs within Europe and
within the UK, but they all havedifferent ways of providing
information, so there is no onestandard way.
And what we saw with the CCPsis that for a lot of them the
specifications were deliveredextremely late.
(08:34):
It was kind of December Januarythat we started to get the
specs in and that put a hugeamount of pressure on the
organization, especially on theteam that actually has to make
the modifications and they haveto read through all of the
specifications, understand, andwe want one kind of standard
approach to provide us theinformation that we need and
that that was a huge challengebecause it really squeezed the
(08:58):
implementation for us and alsoreduced the time that we had to
do really thorough testing andwe only had a few months.
And, yeah, you have to try anddo the best you can with the
limited amount of informationyou have.
So one of the biggestchallenges, I think, was
actually getting the informationfrom the ccps and I would love
(09:18):
to see what, uh, if we get aanother version of refit, that
we actually get the informationat least six months in advance,
because we're kind of at the endof the chain.
We only have a few months to dothe implementation once we get
the finalized specs, and thatjust puts unbelievable amount of
pressure on the wholeorganization and it's not fun.
(09:40):
And I was talking with Nickyesterday.
You mentioned that you lostsome weight as well.
I met Nick yesterday and Iasked him have you lost weight?
And he said that's whatregulatory does to you.
Yeah, the deadlines are sostrict and the pressure is huge
for everybody.
And yesterday when we had thedrinks, it was really nice to
(10:01):
speak with some of you andactually to hear your stories as
well.
It was really nice to speakwith some of you and actually to
hear your stories as well,because, yeah, we really.
Speaker 2 (10:12):
We've all been through a hell of a ride and
we're still on the rollercoaster.
Thank you, felicity.
Speaker 4 (10:15):
Same question to you, paula.
Hi everyone.
Hi everyone.
I would like to go in line withwhat has been already mentioned
by by our line managers ummanagement, sorry and by
felicity as a participant, where, of course, refit has been a
big challenge for everyone.
(10:36):
Um, we had to there.
There were too many changes, uh,for which we needed to adapt in
a very short period of time,but we took this challenge and
and turn it into a opportunityto create a more robust and and
platform well, platforms in thissense, because we we did not
(10:57):
only create a new master entitydata system, which has been
already explained, but also adashboard for our participants.
One of the main challenges whichI guess most of you in this
room were affected was by theintroduction of the FuturEye app
(11:19):
, for which you struggled duringthe first days, but this was a
security requirement that wewere imposed by six, so I guess
it benefits you as well asparticipants, because it uh,
it's a double authenticationmethod for you to securely
access your your dashboards.
(11:39):
Um for the testing during theearly stages, it's true that we
saw that testing rates were verylow until up to the three
months before actually the refitgo live.
This was followed by someinstability issues we did
(12:03):
experience during those days,which have been already covered
by Alfonso.
But calm after the storm.
We see that trades are gettingin, that data is being upgraded
and now participants are nowfocusing on reconciliation rates
(12:24):
, which is also a big player inthis play, and focusing on data
accuracy that is being timelyreported and that is smoothly
getting into our tier.
Speaker 2 (12:44):
Thank you, paola and Tim.
Tim, you're obviously at kaizen.
You've been, you've beenworking with lots of different
types of firms to help themprepare for this change.
Um, what's your experience ofworking with them for this?
Speaker 6 (12:58):
yeah, morning everyone, and thanks to john and
nick and everyone at regionsand six for having me here.
Absolute pleasure to be in thisfabulous building.
I think, john, you said at thestart refit was like a little
bit tailoring to your suit.
I I think it wasn't even a newsuit, I think it was a whole new
wardrobe.
L quartering glaze did verywell for out of refit, for sure.
But to put it into context ofwhat firms have gone through, um
(13:22):
, you know, many commentatorslook at the changes that both
firms and repositories had to doby looking at the increasing
fields, but actually hide somany things.
Every single field changed,apart from about maybe 10,
something like that, that had nochange at all.
Almost all of them changed insome degree, whether that be the
(13:42):
description, whether it be whatgoes into that field, whether
it be the interpretation of thatfield, those are tough things
to implement and indeed, whenour friends at ESMA have near on
a thousand pages ofconsultation and guidelines,
it's what we've asked for, it'swhat we've wanted, but that
comes with it the joint uprequirement for firms to go
(14:05):
through that and interpret anduse all of that interpretation.
And so, again, it's a tough askfor firms and what we've seen
at Kaizen.
The collaboration across theindustry has been excellent, I
think in the lead up to both UKGo Live for refit and EU Go Live
for refit in April.
Prior to that, thecollaboration between trade
(14:25):
repositories and firms and tradeassociations was really, really
good and I think that trend ishere to stay.
I think Alfonso talked about theregulation is getting more
complex.
That's true.
Definitely there's aprescriptive nature of how we
look at the derivativeregulations in Europe, in the
CFTC, in the States from the FCA, in the UK.
(14:47):
That's here to stay and firmsare getting better, I think, at
performing that testing.
So we still see testing alittle bit late, for whatever
reason that may be, such as youknow, know, resources are
limited.
Um, there's other regulationsthat are changing at the same
time across g20.
(15:07):
Um, but the the idea of thissmart testing, of either
assurance testing.
So is your reporting uh, kindof valid but wrong?
Have you?
Have you met the validationrules?
But is there something else?
But also, more importantly, um,when you're testing your
submissions in uat, um, do you,are you testing?
Testing not only the new tradesthat you execute, but also the
lifecycle events, the changesthat we spoke about earlier for
(15:32):
ISO 2022, for XML.
That's been very tough forfirms.
We've seen that quite a lot andit introduces another level of
complexity.
There's also a little bit ofcomplexity around explicit
permissioning, even though it'snot technically new for refit.
But all those things together,I think the day one, or at least
the first week, has beensuccessful for firms in terms of
(15:53):
there are a reasonable numberof rejections, kind of day one,
but they quickly.
The success rate rose very,very quickly to have very small
rejections from the submissions,but overall, overall, firms
have, you know, risen to thechallenge very, very well.
There's still a lot to do,which we're going to talk about,
um, but um, but are the firmsthat we speak into, the trades
(16:15):
that we're testing, kind of showthat the willing is there and
firms are reading everythingthat's there and making sure
that they can adhere to thosechanges as much as they can?
Okay, thank you, tim.
Speaker 2 (16:25):
So that that's there and making sure that they can
adhere to those changes as muchas they can.
Okay, thank you, Tim.
So that's interesting and itbrings us on to our next
question.
So when the refit technicalstandards were released, the
focus was understandably on theadditional 74 reportable data
fields, additional 61reconciliation fields and, as
you mentioned, the mandatory useof the XML.
(16:46):
This is for you, Roberto.
Do you think that the aims ofsimplifying reporting and
improving data quality arereally compatible?
Speaker 5 (16:58):
Well, thank you, john , and thank you, regis, for
having us here to have CNB toexpress our views and our vision
.
Well, you didn't ask me abouthow was the path for authorities
to get through the rapid.
I'm not here to complain, butit was also a difficult path.
Complain, but it was also adifficult path.
(17:20):
We have to rebuild all ourcapacities, all dashboards that
we already had pre-refit andcurrently most of them are
already working.
Regarding your question interms of data quality probably,
(17:43):
probably is too early to toanswer fully this.
This answer rejection rates arenot still at.
We wanted to have them.
(18:05):
And, regarding simplicity, Iwould like to break down a
little bit the 74 new fields.
Well, there are 70 additionalfields, but not all of them
needs to be filled for everysingle transaction or for every
(18:26):
single counterparty.
We expect that, basically, theUPI is there to make some of
them redundant at some time.
So we expect that at some time,some are eliminated, but, as
Tim said, even those that werebefore refeed and most of them,
(18:49):
or some of them, many of them,have been altered somehow.
So, and apart from the, to behonest, these 74 new fields
comes from 89 new fields thatwere additional and 15 were
removed.
So I completely understand whenAlfonso and Maria had the clear
(19:12):
answer that simplicity is notrich.
Well, we think regulators shouldkeep in mind that every single
change we do, it creates costsfor the reporters and it
(19:32):
propagates through all theindustries.
We are well, regulators areaware, and we supervisors also
suffer that.
And regulators also should keepin mind that authorities, as I
said at the beginning of myintervention, we don't have a
(19:55):
lot of buffer capacity to adaptinstantly to new changes.
So well, anyway, my message isoptimistic.
We hope that.
Well, the new fields some ofthem are there to provide the
clearer picture of what thetransaction is, giving more
(20:23):
details on the counterparties.
In my opinion, some of them arethere to clarify things that
weren't obvious at the beginning.
And regarding just to finishXML format to finish XML format,
(20:44):
we as final users were usingXML prior to that, but in our
opinion, of course, the XML is aricher format levels and reach
the reporting but it addscomplexity and we, as a final
(21:07):
user, have to deal with nestedfiles.
It's difficult to extractinformation.
So, yeah, we hope that thiscomplexity, once we all are
adapted will, will pay off um.
Speaker 2 (21:25):
Back to you, roberto.
How does the cnnv view thelong-term impact of emir refit
on market transparency andsystemic risk within the
european financial system?
And I guess the question I'masking here is the question that
is most often asked.
As I said, even 10 years ago itwas a question that was being
asked how relevant is the databeing collected?
(21:48):
How is it being used by NCAAslike yourselves?
Was refit really worth theeffort?
Speaker 5 (21:58):
Well, data is used by final users and is used
intensively.
Well, I'm not in amacroprudential institution, but
I can give you a flavor of someuses that this macroprudential
(22:18):
institution does with the data.
Macroprudential institutions dowith the data.
For example, our researchdepartment uses derivatives data
in order to assess risk on aSpanish level, but the same
thing is done by the EuropeanSystemic Risk Board and that is
(22:42):
a common use that all theauthorities do, even ourselves.
In order to assess differentpolicy alternatives, we use
intensively mere data.
We have other tools, forexample, service or public
consultation, but we are awarethat, depending on who are
(23:03):
asking to, the survey might besomehow biased and data is there
and well, our policyinitiatives now are more
data-driven and I think that'sgood for the whole industrial
markets in general.
(23:26):
Regarding the use that we do atour department, we use EMIR data
to assess compliance withclearing obligations, for
example, with margin chains inbilateral and non-clear trades.
That's something we look at ona continuous basis.
(23:50):
We had several dashboards inwhich, for example, we see
outliers in terms of dataquality.
We have many things.
We run data quality indicators,similar to SMAS, and that's
something we assess.
(24:11):
For example, we have dashboardto understand how the market
evolves from bilateral trades toclear trades, and we've been
using intensively also data inevents.
For example, in the 2022-2023energy crisis, we had a close
(24:40):
look almost daily, look at howthe positions evolved, and that
was useful also to assessdifferent policy alternatives
that were on the table.
Recall during the volatile onbank credit default swaps I
(25:09):
think it was 2023.
And you can remember, forexample, credit Suisse, but not
only.
We had also a close look tothis.
Also, regarding live ordercommissioning, we've been using
intensively data, so data isused, and now, for example, that
(25:35):
we're having notional schedules, we may have a more accurate
picture of how the risk isevolving.
Speaker 6 (25:46):
So well, yes, I am, we, we are intensive users of of
the data yeah, and I think Ijust add, because I we get asked
, because we see so many trades,we get asked a lot.
You know how is the data used.
Even today, we still get askedyou, so you've still got to do
it, regardless of what I say.
But to Roberto's point, thedata is used a lot.
(26:07):
I think it's really important tolook back at where we were 10
years ago, when you know BearStearns, fannie Mae, freddie Mac
, lehman Brothers firms thatwere good, reputable firms right
, and that is true, thefinancial crisis hit them in
different ways, but thetransparency that regulators had
(26:28):
at that time was absolutelyminimal across these different
derivative products.
There were some, but it wasabsolutely minimal, and so to
have that now is reallyimportant.
And I've spoken to the ECB alot, I've spoken to the Bank of
England a lot that love usingthe derivative data that EMEA
reporting provides For somefirms.
That will be a bit scary, butactually, for example, in the UK
(26:52):
, the EMEA reporting data goesto the Monetary Policy Committee
that every month look at whatinterest rates should be for the
UK, and that's really important, not for us that are working
for different financialinstitutions, but for every
single person in that countrythat has a mortgage and it
(27:12):
really hits home that actuallythis data is important, that
data quality is essential and itreally, really is used.
Speaker 2 (27:19):
That's a really interesting perspective.
So thanks Vlad.
Speaker 5 (27:23):
Let me add also regarding from a macroprudential
point of view.
We report on a monthly basis tothe Spanish macroprudential
authority some basic data andsometimes we have to dig into
some details when there'ssomething that has changed
significantly.
Speaker 2 (27:45):
They are also users of data, so you're also using it
to inform policy?
Yeah, okay.
Similar question to you,felicity ABN AMRO Clearing.
Have you been able to repurposethe data?
Can you leverage it foranything else, like trade
monitoring or other activity?
Speaker 3 (28:06):
Not as such.
We have a central courtclearing system that feeds all
of our other systems and we havemultiple departments,
especially in the area of risk,who are looking at different
risks within the organisationand monitoring also trade
activity of the clients, theirbehavior patterns, looking at
(28:29):
credit risk exposure.
So they're all separate teams.
And we also have data scienceteam, data analytics team, and
we're looking at the data fromalso a different perspective,
making predictions.
But that's covered, luckilyenough, by other teams.
Our team is specificallyresponsible for the transaction
reporting and we do.
Actually we also do the thereconciliation of the controls
ourselves as well oncompleteness and timeliness and
(28:51):
accuracy and what tim just saidas well, and we're reporting on
behalf of, I think, 170 clients.
So just because the data ismatching doesn't actually mean
that it's accurate and that'ssomething that we have many
controls in place to identifywhere the issues are.
We still have controls toimplement, trying to find where
(29:12):
are the inaccuracies in the dataand making sure that we are
adhering and complying to theregulation.
Speaker 2 (29:18):
Thank you, felicity.
Okay, so we've a couple morequestions and then, hopefully,
we should be able to have timefor a few questions from the
audience.
So, paola, the title of thispanel suggests that the
programme of change requiredmore of a rebuild than a refit,
(29:43):
than a refit From a Registrperspective and a client
perspective, and we've heard tosome extent already, but perhaps
you can just summarize whatopportunities has this presented
in order to improve the serviceto our clients?
Speaker 4 (29:55):
Yeah, I would like to first well my memories one, two
.
First step in provided the 10years of experience I've been in
Registr because I felt in myown skin the reporting start
date of basically all theregulations.
(30:15):
We thought that with the wellin my own experience when I was
first appointed at the clientservice side.
This happened when we launchedthe new revised technical
standards in Emir.
I think it was back in 2017.
Then, on the same year, it wasthe reporting start date for
(30:40):
FinFRAC Completely newregulation and understanding of
the guidelines as well.
And three years later, whicheveryone may recall, not an easy
summer either we had the launchof SFTR, which coincides as
well with the COVID times, wherewe had to manage client
expectations and handle queriesfrom them on a remote working
(31:05):
environment, which was brand newfor everyone, I guess.
So, yeah, so, as I've mentionedin the first part of the speech
, this challenge has supposed acomplete rewrite of the, of the
regular, of the regulation whichprovided us the the chance to
(31:29):
create a total new platform forclients, total new environment,
which the main goal was to makeclients more independent with
the use of these tools, and Itake advantage of this
participation to thanks also myteam and on the other areas at
(31:52):
Registeer for the support thatwas provided by those times.
Speaker 2 (31:57):
To be honest, I'd completely forgotten about COVID
.
Maria asked me a couple of daysago, how many times did we run
this event?
And I was working out and I gotour audience here the CNMV's
expectations regarding theaccuracy of more of the view.
This has been an obligation for10 years and and therefore
(32:45):
there's not so much tolerancefor non-compliance.
And then, finally, if I couldjust add an extra question on
the end, what advice can yougive our market participants as
to how they can meet therequirements to ensure effective
supervision?
Speaker 5 (33:03):
Okay.
Well, regarding enforceability,the CNMB historically has been
too punitive in putting finesfor data quality issues.
Our approach has always been tobe proactive, contactee with
(33:25):
basically basically your clientswhen we have observed any data
quality issue.
And prior to RedFit, we wereworking on a tool to be even
more proactive and we had thesemi-automatic tool to interact
(33:50):
with with counterparties thatwere performing poorly in the
data quality indicators that wehave.
So, having said that, thatdoesn't mean that cannot change,
but we don't expect from ourside to change dramatically.
(34:13):
But I also would like toexpress to the audience that
under EMIR 3.0, it is suspectedthat the sanction regime evolves
and if there's a detection ofwhat is called systemic manifest
(34:34):
errors, we authorities aregoing to be bound even we like
or we don't like, we are boundto impose some fines and even
periodic fines up to theremediation is implemented.
So that's important.
(34:57):
That's something that is notgoing to be there tomorrow, but
it is there on the May 3.0.
Regarding recommendations,lesson learned.
Well, let me talk first aboutEMIR Refit implementation.
(35:20):
We contacted with threerepositories all across the
board and we felt that I thinkPaula mentioned before and Maria
also mentioned before testingwas very poor months and weeks
close to the ago life now,regarding legacy trades, one
(35:48):
month ago, the obligation tomigrate legacy trades into force
and we see that there's stillroom for improvement for some
counterparties, and that'ssomething that it was mentioned
before too.
So, and now, from an overallpoint of view, in is our vision
(36:15):
that the main recommendation isthat counterparties should
reconcile their reporting withtheir internal books, their
trading books, accountinginformation, whatever.
That would solve most of therepeated errors in reporting,
(36:38):
like duplication, stallvaluations, things like that
should be easily identified.
Also, we would like to mentionthat internal audit and internal
control teams forcounterparties should keep
within the scope of their workto assess if their procedures,
(37:02):
policies and implementation ofthose policies are correct and
the implementation of thosepolicies are correct, and when
changes, when big changes,significant changes, are there.
Of course, we recommendcounterparties to allocate
budgets, resources, time therein order to be to be prepared on
(37:30):
time.
Yes, an additional point Iwanted to make is also you
should control your delegates.
You may delegate your reporting, but that doesn't mean that you
(37:52):
can forget about that, and wesometimes we find that, um, that
that's not the case, that youyou delegate also your
responsibility, so that'ssomething, uh, key area to focus
thank you, tim.
Speaker 2 (38:01):
I saw you scribbling there.
You've got maybe 30 seconds ifyou want to make a quick point
before we go to questions.
Speaker 6 (38:09):
No, I think it's very pragmatic.
I'm seeing that.
I think it's really sensiblethings that you're saying,
roberto, on how the approach is.
I think many of the NCAAs thatwe've spoken to are kind of put
more effort on looking forward.
So, what the data is now, howit's reported now, obviously,
making sure that everything'sbeen converted to the new format
.
I think that it's reallyimportant, rather, look at the
(38:30):
old data that's um, in, in onesense, out of date, um, but then
also that means you have got toget the new stuff right.
You have got to make sureyou've got your checks and
balances in place, and youmentioned their reconciliation
against books, against yourinternal books.
I think it's smart, um, youknow your assurance, testing,
your, your training and ofindividuals we've not mentioned
today.
There's a world of things tolearn and, um, to have all of
(38:52):
those things, john, is, isabsolutely essential.
That's.
That's the way you have afighting chance of getting it
right.
Um, um, it's, and, and you, yougot to read these regs.
You got to read them in theamount of firms I speak to.
That don't?
It keeps me in a job.
When, when, if you don't wantto read the regs, I'm here,
right, but, um, if you read theregs, it really really helps, um
, but um, yeah, thereconciliations and just having
(39:14):
the small checks and balancesacross a few things is is a
world of difference from uh,from not but uh, we've we kept
you long enough with thisdiscussion.
Speaker 2 (39:25):
As I said, if you do have any further questions, I'm
sure you can.
Uh, you can grab one of us, aswe're mingling uh various points
during the day.
So it remains to me to uh thanksincerely my panelists for
their contribution and thank youalso for your attention and
your contribution.
Thank you okay.
Speaker 1 (39:45):
well, that is it for this episode of the registry art
roundup podcast, but do comeback and join us.
We'll be doing another showsoon, also with some interesting
insights recorded live at thepalacio de la bolsas.
And, uh, don't forget to joinus on our linkedin channel, that
is linkedincom slash company,slash regis hyphen, where you
(40:05):
can network with John and withFelicity and with Roberto and
Tim and Paola and myself, and,of course, I'll produce Manuel
Moreno Garcia here in thevirtual studio and make sure
that you like and subscribe tothe show on your favorite
podcasting app so you never missthe insights under the hood and
behind the scenes in the worldof regtech, fintech and
(40:28):
regulator reporting.
So, from me, andrewKeith-Walker, from our producer,
manuel, and from everyone elsehere in the virtual studio,
we'll see you soon.
This podcast is brought to you by RegistryR,
which is a member of the SixGroup, and features members of
the RegistryR team and specialguests expressing their personal
opinions, not the opinions ofRegistryR as an organization.
There is no representation madeas to the accuracy or
completeness of information inthis podcast, and nor should it
be taken as legal tax oranything.
(00:28):
Hello and welcome back to theRegistry Hour Roundup podcast.
Yes, it's February and we areback in the virtual studio, but
not for long, because in thisshow we're doing something
slightly different.
We are bringing you a show thatwas recorded live a few weeks
back in Madrid at the Palacio dela Balsas, the Madrid Stock
(00:50):
Exchange for those of you whodon't speak Spanish and this was
hosted by John Kernan, regularco-host here on the show, the
man who used to put the canaryin the wharf and now looks after
St Mary's Axe, the CEO ofRegistry UK.
And John was joined by PaoloLopez, the nicest and most
(01:11):
efficient person in theorganisation, also the head of
client services at Registry 6.
And they have three veryspecial guests Felicity Howley,
who is the product owner forregulatory reporting at ABN Amru
Clearing Roberto Banejo, whoworks the product owner for
regulatory reporting at ABN AmruClearing Roberto Benejo, who
(01:33):
works in the secondary marketsdepartment he's the deputy
director there in thepost-trading division of CNMV
and of course, tim Hartley, anold friend of the show, who is
the director of reporting atKaizen, and together they have a
very full and candid discussionabout the challenges posed by
refit, how the implementationwent and how the rollout and use
(01:54):
of that data is progressing.
So, without further ado, let'stravel to Madrid, and here's
John Kernan to Madrid.
Speaker 2 (02:13):
And here's John Kernan.
Good morning everyone.
The last time I stood on thisstage, two years ago, I was 10
kilos heavier than I am now.
God willing, when I come backin two years, I'll probably put
it all back on again.
Refit is what the tailor does tomy trousers Adjusts them a
couple of centimetres here andthere, quickly, cheaply, easily
(02:34):
done.
These are not adjectives we'vecome to associate with emir
refit.
Whilst it may seem a bitpedantic arguing about semantics
, I think it's important toacknowledge the scale of refit.
Whilst it may seem a bitpedantic arguing about semantics
, I think it's important toacknowledge the scale of refit,
or rebuild, as I'm suggestinghere, and the impact on market
participants, regulators andtrade repositories.
(02:57):
As we explore some of this withour panel of esteemed experts,
we'll examine whether the painof rebuild, whether the pain of
the rebuild, has resulted in amore precise reporting standards
and better data quality.
So, without further ado, I willintroduce my esteemed
(03:18):
panellists, starting withFelicity.
Felicity is the product ownerof regulatory reporting at ABN
AMRO Clearing Bank.
She's responsible for both EMIRand SFTR.
She started out in clearing 18years ago as a developer and
transitioned into a businessanalyst.
In 2021, she joined RegReporting as a business analyst,
(03:39):
where she became product ownerjust in time to deliver Refit,
where she became product ownerjust in time to deliver refit
Outside of work.
She's the mother of two teenagedaughters and as someone who
also has two teenage daughters,I suspect it's a bigger
challenge than refit Tim.
Tim has 15 years in theindustry.
He's a specialist in emailreporting with a deep
(04:03):
understanding of all the tradeand position reporting lifecycle
.
Tim has assisted and advised abroad range of firms, including
hedge funds, asset managers,brokers and non-financial
institutions, to enable them tomeet their regulatory reporting
requirements, implementfit-for-purpose and best
practice approaches, as well asavoid regulatory scrutiny and
(04:25):
enforcement action.
Prior to Kaizen, tim was anEMEA and SFTR reporting
specialist for Kroll, and he'salso spent five years leading
and developing this, the CMEtrade repulsory, as a global
head of client services.
And now on to Roberto.
Roberto is the deputy Directorof the Post-Trading Area in
(04:45):
charge of supervision of EMEAand SFTR reporting, ccps and
CSDs.
Roberto joined the CNMV in 2018and since then he's been
involved in the supervision ofthe CCP data quality of various
EU reporting obligations and hasbeen the CNMV's representative
(05:06):
in the College of Supervisors.
Roberto participates in EUpolicy development regarding
post-trading.
He's also supervised internalmodels for CCPs and investment
firms.
Previously, roberto worked forentities participating in
financial markets and for globaladvisory firms.
He has extensive experience inrisk management, financial
(05:28):
instrument valuation andcorporate finance.
And, last but not least, paolaPaola's our head of client
services, and I've had the greatpleasure of working with her
for the last 10 years at Registr.
Prior to assuming the role ofhead, paola was the deputy head
and, given that regulatoryreporting is so technical and
(05:50):
niche, it's my view that servicesupport is a really challenging
place to be.
So, without further ado, let'sget into the panel.
So first of all, I'd like tounderstand better the challenges
with the implementation ofReefage.
How did you and all yourparticipants navigate through
(06:11):
this change process and how arethings now, six months after the
EU reporting start date and sixweeks after the UK reporting
start date?
If I may start with you,felicity, please.
Speaker 3 (06:24):
Yep, can you hear me?
Ok?
Okay, yes, I think so.
Yeah, so our journey for refitstarted in 2022 and we started
looking at the preliminarydocumentation that was available
by ESMA and we needed to get anunderstanding of what the
impact was for ABIA and ammoclearing, notaring not just for
regulatory reporting but alsofor the other departments within
(06:45):
the organisation.
And we realised that the impactwas substantial and we had
discussions actually with Regis,also with some other CCPs, to
understand what they were goingto do with their implementation,
and basically, everybody wasrebuilding from scratch and we
were doing the exact same.
And you have a very short spaceof time to do that.
(07:06):
There's nothing like aregulatory deadline to put the
pressure on.
So we realized, in order to beable to deliver on time, we had
to basically double the size ofthe team.
So we started hiring newmembers of the team, and that's
also a challenge in itself.
You have a team of experts andit's it's very difficult to find
(07:28):
expertise on the market whounderstands clearing, who
understands regulatory and whounderstands the it.
So, yeah, you're trying to makeand get a balance, and that
that was also very difficult.
Um, but yeah, we, we went outbasically on a roadshow to the
rest of the organisation andshared the impact for the other
teams.
So we knew we needed to get newfields from them.
(07:51):
But the most difficult part waswe didn't know how those fields
were going to come in.
So that was actually one of thebiggest challenges for us was
getting the information from theCCPs.
So we were building literallyfrom the inside out, building
the systems that we.
So we were building literallyfrom the inside out, building
the systems that we knew.
We had to deliver the reportsto Regis and we needed to know
(08:13):
how we were actually going toget the information in.
And we have I don't know howmany CCPs within Europe and
within the UK, but they all havedifferent ways of providing
information, so there is no onestandard way.
And what we saw with the CCPsis that for a lot of them the
specifications were deliveredextremely late.
(08:34):
It was kind of December Januarythat we started to get the
specs in and that put a hugeamount of pressure on the
organization, especially on theteam that actually has to make
the modifications and they haveto read through all of the
specifications, understand, andwe want one kind of standard
approach to provide us theinformation that we need and
that that was a huge challengebecause it really squeezed the
(08:58):
implementation for us and alsoreduced the time that we had to
do really thorough testing andwe only had a few months.
And, yeah, you have to try anddo the best you can with the
limited amount of informationyou have.
So one of the biggestchallenges, I think, was
actually getting the informationfrom the ccps and I would love
(09:18):
to see what, uh, if we get aanother version of refit, that
we actually get the informationat least six months in advance,
because we're kind of at the endof the chain.
We only have a few months to dothe implementation once we get
the finalized specs, and thatjust puts unbelievable amount of
pressure on the wholeorganization and it's not fun.
(09:40):
And I was talking with Nickyesterday.
You mentioned that you lostsome weight as well.
I met Nick yesterday and Iasked him have you lost weight?
And he said that's whatregulatory does to you.
Yeah, the deadlines are sostrict and the pressure is huge
for everybody.
And yesterday when we had thedrinks, it was really nice to
(10:01):
speak with some of you andactually to hear your stories as
well.
It was really nice to speakwith some of you and actually to
hear your stories as well,because, yeah, we really.
Speaker 2 (10:12):
We've all been through a hell of a ride and
we're still on the rollercoaster.
Thank you, felicity.
Speaker 4 (10:15):
Same question to you, paula.
Hi everyone.
Hi everyone.
I would like to go in line withwhat has been already mentioned
by by our line managers ummanagement, sorry and by
felicity as a participant, where, of course, refit has been a
big challenge for everyone.
(10:36):
Um, we had to there.
There were too many changes, uh,for which we needed to adapt in
a very short period of time,but we took this challenge and
and turn it into a opportunityto create a more robust and and
platform well, platforms in thissense, because we we did not
(10:57):
only create a new master entitydata system, which has been
already explained, but also adashboard for our participants.
One of the main challenges whichI guess most of you in this
room were affected was by theintroduction of the FuturEye app
(11:19):
, for which you struggled duringthe first days, but this was a
security requirement that wewere imposed by six, so I guess
it benefits you as well asparticipants, because it uh,
it's a double authenticationmethod for you to securely
access your your dashboards.
(11:39):
Um for the testing during theearly stages, it's true that we
saw that testing rates were verylow until up to the three
months before actually the refitgo live.
This was followed by someinstability issues we did
(12:03):
experience during those days,which have been already covered
by Alfonso.
But calm after the storm.
We see that trades are gettingin, that data is being upgraded
and now participants are nowfocusing on reconciliation rates
(12:24):
, which is also a big player inthis play, and focusing on data
accuracy that is being timelyreported and that is smoothly
getting into our tier.
Speaker 2 (12:44):
Thank you, paola and Tim.
Tim, you're obviously at kaizen.
You've been, you've beenworking with lots of different
types of firms to help themprepare for this change.
Um, what's your experience ofworking with them for this?
Speaker 6 (12:58):
yeah, morning everyone, and thanks to john and
nick and everyone at regionsand six for having me here.
Absolute pleasure to be in thisfabulous building.
I think, john, you said at thestart refit was like a little
bit tailoring to your suit.
I I think it wasn't even a newsuit, I think it was a whole new
wardrobe.
L quartering glaze did verywell for out of refit, for sure.
But to put it into context ofwhat firms have gone through, um
(13:22):
, you know, many commentatorslook at the changes that both
firms and repositories had to doby looking at the increasing
fields, but actually hide somany things.
Every single field changed,apart from about maybe 10,
something like that, that had nochange at all.
Almost all of them changed insome degree, whether that be the
(13:42):
description, whether it be whatgoes into that field, whether
it be the interpretation of thatfield, those are tough things
to implement and indeed, whenour friends at ESMA have near on
a thousand pages ofconsultation and guidelines,
it's what we've asked for, it'swhat we've wanted, but that
comes with it the joint uprequirement for firms to go
(14:05):
through that and interpret anduse all of that interpretation.
And so, again, it's a tough askfor firms and what we've seen
at Kaizen.
The collaboration across theindustry has been excellent, I
think in the lead up to both UKGo Live for refit and EU Go Live
for refit in April.
Prior to that, thecollaboration between trade
(14:25):
repositories and firms and tradeassociations was really, really
good and I think that trend ishere to stay.
I think Alfonso talked about theregulation is getting more
complex.
That's true.
Definitely there's aprescriptive nature of how we
look at the derivativeregulations in Europe, in the
CFTC, in the States from the FCA, in the UK.
(14:47):
That's here to stay and firmsare getting better, I think, at
performing that testing.
So we still see testing alittle bit late, for whatever
reason that may be, such as youknow, know, resources are
limited.
Um, there's other regulationsthat are changing at the same
time across g20.
(15:07):
Um, but the the idea of thissmart testing, of either
assurance testing.
So is your reporting uh, kindof valid but wrong?
Have you?
Have you met the validationrules?
But is there something else?
But also, more importantly, um,when you're testing your
submissions in uat, um, do you,are you testing?
Testing not only the new tradesthat you execute, but also the
lifecycle events, the changesthat we spoke about earlier for
(15:32):
ISO 2022, for XML.
That's been very tough forfirms.
We've seen that quite a lot andit introduces another level of
complexity.
There's also a little bit ofcomplexity around explicit
permissioning, even though it'snot technically new for refit.
But all those things together,I think the day one, or at least
the first week, has beensuccessful for firms in terms of
(15:53):
there are a reasonable numberof rejections, kind of day one,
but they quickly.
The success rate rose very,very quickly to have very small
rejections from the submissions,but overall, overall, firms
have, you know, risen to thechallenge very, very well.
There's still a lot to do,which we're going to talk about,
um, but um, but are the firmsthat we speak into, the trades
(16:15):
that we're testing, kind of showthat the willing is there and
firms are reading everythingthat's there and making sure
that they can adhere to thosechanges as much as they can?
Okay, thank you, tim.
Speaker 2 (16:25):
So that that's there and making sure that they can
adhere to those changes as muchas they can.
Okay, thank you, Tim.
So that's interesting and itbrings us on to our next
question.
So when the refit technicalstandards were released, the
focus was understandably on theadditional 74 reportable data
fields, additional 61reconciliation fields and, as
you mentioned, the mandatory useof the XML.
(16:46):
This is for you, Roberto.
Do you think that the aims ofsimplifying reporting and
improving data quality arereally compatible?
Speaker 5 (16:58):
Well, thank you, john , and thank you, regis, for
having us here to have CNB toexpress our views and our vision
.
Well, you didn't ask me abouthow was the path for authorities
to get through the rapid.
I'm not here to complain, butit was also a difficult path.
Complain, but it was also adifficult path.
(17:20):
We have to rebuild all ourcapacities, all dashboards that
we already had pre-refit andcurrently most of them are
already working.
Regarding your question interms of data quality probably,
(17:43):
probably is too early to toanswer fully this.
This answer rejection rates arenot still at.
We wanted to have them.
(18:05):
And, regarding simplicity, Iwould like to break down a
little bit the 74 new fields.
Well, there are 70 additionalfields, but not all of them
needs to be filled for everysingle transaction or for every
(18:26):
single counterparty.
We expect that, basically, theUPI is there to make some of
them redundant at some time.
So we expect that at some time,some are eliminated, but, as
Tim said, even those that werebefore refeed and most of them,
(18:49):
or some of them, many of them,have been altered somehow.
So, and apart from the, to behonest, these 74 new fields
comes from 89 new fields thatwere additional and 15 were
removed.
So I completely understand whenAlfonso and Maria had the clear
(19:12):
answer that simplicity is notrich.
Well, we think regulators shouldkeep in mind that every single
change we do, it creates costsfor the reporters and it
(19:32):
propagates through all theindustries.
We are well, regulators areaware, and we supervisors also
suffer that.
And regulators also should keepin mind that authorities, as I
said at the beginning of myintervention, we don't have a
(19:55):
lot of buffer capacity to adaptinstantly to new changes.
So well, anyway, my message isoptimistic.
We hope that.
Well, the new fields some ofthem are there to provide the
clearer picture of what thetransaction is, giving more
(20:23):
details on the counterparties.
In my opinion, some of them arethere to clarify things that
weren't obvious at the beginning.
And regarding just to finishXML format to finish XML format,
(20:44):
we as final users were usingXML prior to that, but in our
opinion, of course, the XML is aricher format levels and reach
the reporting but it addscomplexity and we, as a final
(21:07):
user, have to deal with nestedfiles.
It's difficult to extractinformation.
So, yeah, we hope that thiscomplexity, once we all are
adapted will, will pay off um.
Speaker 2 (21:25):
Back to you, roberto.
How does the cnnv view thelong-term impact of emir refit
on market transparency andsystemic risk within the
european financial system?
And I guess the question I'masking here is the question that
is most often asked.
As I said, even 10 years ago itwas a question that was being
asked how relevant is the databeing collected?
(21:48):
How is it being used by NCAAslike yourselves?
Was refit really worth theeffort?
Speaker 5 (21:58):
Well, data is used by final users and is used
intensively.
Well, I'm not in amacroprudential institution, but
I can give you a flavor of someuses that this macroprudential
(22:18):
institution does with the data.
Macroprudential institutions dowith the data.
For example, our researchdepartment uses derivatives data
in order to assess risk on aSpanish level, but the same
thing is done by the EuropeanSystemic Risk Board and that is
(22:42):
a common use that all theauthorities do, even ourselves.
In order to assess differentpolicy alternatives, we use
intensively mere data.
We have other tools, forexample, service or public
consultation, but we are awarethat, depending on who are
(23:03):
asking to, the survey might besomehow biased and data is there
and well, our policyinitiatives now are more
data-driven and I think that'sgood for the whole industrial
markets in general.
(23:26):
Regarding the use that we do atour department, we use EMIR data
to assess compliance withclearing obligations, for
example, with margin chains inbilateral and non-clear trades.
That's something we look at ona continuous basis.
(23:50):
We had several dashboards inwhich, for example, we see
outliers in terms of dataquality.
We have many things.
We run data quality indicators,similar to SMAS, and that's
something we assess.
(24:11):
For example, we have dashboardto understand how the market
evolves from bilateral trades toclear trades, and we've been
using intensively also data inevents.
For example, in the 2022-2023energy crisis, we had a close
(24:40):
look almost daily, look at howthe positions evolved, and that
was useful also to assessdifferent policy alternatives
that were on the table.
Recall during the volatile onbank credit default swaps I
(25:09):
think it was 2023.
And you can remember, forexample, credit Suisse, but not
only.
We had also a close look tothis.
Also, regarding live ordercommissioning, we've been using
intensively data, so data isused, and now, for example, that
(25:35):
we're having notional schedules, we may have a more accurate
picture of how the risk isevolving.
Speaker 6 (25:46):
So well, yes, I am, we, we are intensive users of of
the data yeah, and I think Ijust add, because I we get asked
, because we see so many trades,we get asked a lot.
You know how is the data used.
Even today, we still get askedyou, so you've still got to do
it, regardless of what I say.
But to Roberto's point, thedata is used a lot.
(26:07):
I think it's really important tolook back at where we were 10
years ago, when you know BearStearns, fannie Mae, freddie Mac
, lehman Brothers firms thatwere good, reputable firms right
, and that is true, thefinancial crisis hit them in
different ways, but thetransparency that regulators had
(26:28):
at that time was absolutelyminimal across these different
derivative products.
There were some, but it wasabsolutely minimal, and so to
have that now is reallyimportant.
And I've spoken to the ECB alot, I've spoken to the Bank of
England a lot that love usingthe derivative data that EMEA
reporting provides For somefirms.
That will be a bit scary, butactually, for example, in the UK
(26:52):
, the EMEA reporting data goesto the Monetary Policy Committee
that every month look at whatinterest rates should be for the
UK, and that's really important, not for us that are working
for different financialinstitutions, but for every
single person in that countrythat has a mortgage and it
(27:12):
really hits home that actuallythis data is important, that
data quality is essential and itreally, really is used.
Speaker 2 (27:19):
That's a really interesting perspective.
So thanks Vlad.
Speaker 5 (27:23):
Let me add also regarding from a macroprudential
point of view.
We report on a monthly basis tothe Spanish macroprudential
authority some basic data andsometimes we have to dig into
some details when there'ssomething that has changed
significantly.
Speaker 2 (27:45):
They are also users of data, so you're also using it
to inform policy?
Yeah, okay.
Similar question to you,felicity ABN AMRO Clearing.
Have you been able to repurposethe data?
Can you leverage it foranything else, like trade
monitoring or other activity?
Speaker 3 (28:06):
Not as such.
We have a central courtclearing system that feeds all
of our other systems and we havemultiple departments,
especially in the area of risk,who are looking at different
risks within the organisationand monitoring also trade
activity of the clients, theirbehavior patterns, looking at
(28:29):
credit risk exposure.
So they're all separate teams.
And we also have data scienceteam, data analytics team, and
we're looking at the data fromalso a different perspective,
making predictions.
But that's covered, luckilyenough, by other teams.
Our team is specificallyresponsible for the transaction
reporting and we do.
Actually we also do the thereconciliation of the controls
ourselves as well oncompleteness and timeliness and
(28:51):
accuracy and what tim just saidas well, and we're reporting on
behalf of, I think, 170 clients.
So just because the data ismatching doesn't actually mean
that it's accurate and that'ssomething that we have many
controls in place to identifywhere the issues are.
We still have controls toimplement, trying to find where
(29:12):
are the inaccuracies in the dataand making sure that we are
adhering and complying to theregulation.
Speaker 2 (29:18):
Thank you, felicity.
Okay, so we've a couple morequestions and then, hopefully,
we should be able to have timefor a few questions from the
audience.
So, paola, the title of thispanel suggests that the
programme of change requiredmore of a rebuild than a refit,
(29:43):
than a refit From a Registrperspective and a client
perspective, and we've heard tosome extent already, but perhaps
you can just summarize whatopportunities has this presented
in order to improve the serviceto our clients?
Speaker 4 (29:55):
Yeah, I would like to first well my memories one, two
.
First step in provided the 10years of experience I've been in
Registr because I felt in myown skin the reporting start
date of basically all theregulations.
(30:15):
We thought that with the wellin my own experience when I was
first appointed at the clientservice side.
This happened when we launchedthe new revised technical
standards in Emir.
I think it was back in 2017.
Then, on the same year, it wasthe reporting start date for
(30:40):
FinFRAC Completely newregulation and understanding of
the guidelines as well.
And three years later, whicheveryone may recall, not an easy
summer either we had the launchof SFTR, which coincides as
well with the COVID times, wherewe had to manage client
expectations and handle queriesfrom them on a remote working
(31:05):
environment, which was brand newfor everyone, I guess.
So, yeah, so, as I've mentionedin the first part of the speech
, this challenge has supposed acomplete rewrite of the, of the
regular, of the regulation whichprovided us the the chance to
(31:29):
create a total new platform forclients, total new environment,
which the main goal was to makeclients more independent with
the use of these tools, and Itake advantage of this
participation to thanks also myteam and on the other areas at
(31:52):
Registeer for the support thatwas provided by those times.
Speaker 2 (31:57):
To be honest, I'd completely forgotten about COVID
.
Maria asked me a couple of daysago, how many times did we run
this event?
And I was working out and I gotour audience here the CNMV's
expectations regarding theaccuracy of more of the view.
This has been an obligation for10 years and and therefore
(32:45):
there's not so much tolerancefor non-compliance.
And then, finally, if I couldjust add an extra question on
the end, what advice can yougive our market participants as
to how they can meet therequirements to ensure effective
supervision?
Speaker 5 (33:03):
Okay.
Well, regarding enforceability,the CNMB historically has been
too punitive in putting finesfor data quality issues.
Our approach has always been tobe proactive, contactee with
(33:25):
basically basically your clientswhen we have observed any data
quality issue.
And prior to RedFit, we wereworking on a tool to be even
more proactive and we had thesemi-automatic tool to interact
(33:50):
with with counterparties thatwere performing poorly in the
data quality indicators that wehave.
So, having said that, thatdoesn't mean that cannot change,
but we don't expect from ourside to change dramatically.
(34:13):
But I also would like toexpress to the audience that
under EMIR 3.0, it is suspectedthat the sanction regime evolves
and if there's a detection ofwhat is called systemic manifest
(34:34):
errors, we authorities aregoing to be bound even we like
or we don't like, we are boundto impose some fines and even
periodic fines up to theremediation is implemented.
So that's important.
(34:57):
That's something that is notgoing to be there tomorrow, but
it is there on the May 3.0.
Regarding recommendations,lesson learned.
Well, let me talk first aboutEMIR Refit implementation.
(35:20):
We contacted with threerepositories all across the
board and we felt that I thinkPaula mentioned before and Maria
also mentioned before testingwas very poor months and weeks
close to the ago life now,regarding legacy trades, one
(35:48):
month ago, the obligation tomigrate legacy trades into force
and we see that there's stillroom for improvement for some
counterparties, and that'ssomething that it was mentioned
before too.
So, and now, from an overallpoint of view, in is our vision
(36:15):
that the main recommendation isthat counterparties should
reconcile their reporting withtheir internal books, their
trading books, accountinginformation, whatever.
That would solve most of therepeated errors in reporting,
(36:38):
like duplication, stallvaluations, things like that
should be easily identified.
Also, we would like to mentionthat internal audit and internal
control teams forcounterparties should keep
within the scope of their workto assess if their procedures,
(37:02):
policies and implementation ofthose policies are correct and
the implementation of thosepolicies are correct, and when
changes, when big changes,significant changes, are there.
Of course, we recommendcounterparties to allocate
budgets, resources, time therein order to be to be prepared on
(37:30):
time.
Yes, an additional point Iwanted to make is also you
should control your delegates.
You may delegate your reporting, but that doesn't mean that you
(37:52):
can forget about that, and wesometimes we find that, um, that
that's not the case, that youyou delegate also your
responsibility, so that'ssomething, uh, key area to focus
thank you, tim.
Speaker 2 (38:01):
I saw you scribbling there.
You've got maybe 30 seconds ifyou want to make a quick point
before we go to questions.
Speaker 6 (38:09):
No, I think it's very pragmatic.
I'm seeing that.
I think it's really sensiblethings that you're saying,
roberto, on how the approach is.
I think many of the NCAAs thatwe've spoken to are kind of put
more effort on looking forward.
So, what the data is now, howit's reported now, obviously,
making sure that everything'sbeen converted to the new format
.
I think that it's reallyimportant, rather, look at the
(38:30):
old data that's um, in, in onesense, out of date, um, but then
also that means you have got toget the new stuff right.
You have got to make sureyou've got your checks and
balances in place, and youmentioned their reconciliation
against books, against yourinternal books.
I think it's smart, um, youknow your assurance, testing,
your, your training and ofindividuals we've not mentioned
today.
There's a world of things tolearn and, um, to have all of
(38:52):
those things, john, is, isabsolutely essential.
That's.
That's the way you have afighting chance of getting it
right.
Um, um, it's, and, and you, yougot to read these regs.
You got to read them in theamount of firms I speak to.
That don't?
It keeps me in a job.
When, when, if you don't wantto read the regs, I'm here,
right, but, um, if you read theregs, it really really helps, um
, but um, yeah, thereconciliations and just having
(39:14):
the small checks and balancesacross a few things is is a
world of difference from uh,from not but uh, we've we kept
you long enough with thisdiscussion.
Speaker 2 (39:25):
As I said, if you do have any further questions, I'm
sure you can.
Uh, you can grab one of us, aswe're mingling uh various points
during the day.
So it remains to me to uh thanksincerely my panelists for
their contribution and thank youalso for your attention and
your contribution.
Thank you okay.
Speaker 1 (39:45):
well, that is it for this episode of the registry art
roundup podcast, but do comeback and join us.
We'll be doing another showsoon, also with some interesting
insights recorded live at thepalacio de la bolsas.
And, uh, don't forget to joinus on our linkedin channel, that
is linkedincom slash company,slash regis hyphen, where you
(40:05):
can network with John and withFelicity and with Roberto and
Tim and Paola and myself, and,of course, I'll produce Manuel
Moreno Garcia here in thevirtual studio and make sure
that you like and subscribe tothe show on your favorite
podcasting app so you never missthe insights under the hood and
behind the scenes in the worldof regtech, fintech and
(40:28):
regulator reporting.
So, from me, andrewKeith-Walker, from our producer,
manuel, and from everyone elsehere in the virtual studio,
we'll see you soon.
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