SteelEye Archives - The TRADE https://www.thetradenews.com/tag/steeleye/ The leading news-based website for buy-side traders and hedge funds Fri, 20 Dec 2024 10:41:29 +0000 en-US hourly 1 The TRADE predictions series 2025: The evolving regulatory landscape https://www.thetradenews.com/the-trade-predictions-series-2025-the-evolving-regulatory-landscape/ https://www.thetradenews.com/the-trade-predictions-series-2025-the-evolving-regulatory-landscape/#respond Mon, 23 Dec 2024 09:00:37 +0000 https://www.thetradenews.com/?p=99224 Thought leaders from Instinet, Duco, Cboe Clear Europe, SteelEye, and Euronext unpack the plethora of market structure and regulatory changes expected in 2025 and beyond, touching on T+1, DORA, Emir 3.0 and more.

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Simon Dove, managing director, head of liquidity at Instinet Incorporated

As we bid farewell to 2024, we are left with many questions about the dawn of 2025, a year that promises to be a game-changer. We already have key milestones within the ever-fluid EMEA regulatory landscape, including DORA and implementing the Mifid II and Mifir review. We will likely witness further regulatory divergence between the UK and the EU. Still, all parties must act swiftly to address the macro-level challenges affecting primary market listings and the lack of investment in the EMEA region. It is imperative that action is taken on all fronts. 

We should finally see, on a grander scale, AI usage moving from an over-used buzzword bingo to a reality. The pursuit of innovation will persist, with new entrants needing to demonstrate credible and distinctive credentials in a highly competitive and demanding environment, where only those that offer something unique will ultimately endure.

As the industry moves towards a consolidated tape and the looming T+1 deadline, established players will likely continue positioning themselves to expand their market share or protect their existing trading, data, and technology businesses. This is set against a backdrop of rising industry costs, which will inevitably face heightened scrutiny.  Liquidity sweet spots like retail, blocks, bilateral and VWAP crossing will again dominate many liquidity discussions. The bilateral debate will likely persist, and we can expect engaging discussions from industry participants and regulators. 

Furthermore, the ‘Trump effect’ looms on the horizon; this could exacerbate market volatility in the year ahead, a reality that will soon become apparent. In 2025, we must challenge existing workflows and the status quo to innovate and compete globally. We all have a role to play in establishing the EMEA ecosystem as a model of excellence for the global trading community next year and beyond.

Steve Walsh, director of product and solutions, Duco 

This has been one of the most consequential years for financial market regulation in a decade. New compliance requirements have reshaped frameworks in Europe and across the globe. The two most important regulations were the Emir refit at the end of April and the US transition to a T+1 settlement cycle. Both regulations aim to enhance transparency and resilience. 

The Emir refit’s primary motivation was to improve data quality and transparency in the European derivative markets with mandatory data reconciliation requirements and obligations to report material issues to national competent authorities (NCAs). While the transition was largely successful, regulators next year will need to address lingering issues around data accuracy and integrity on data reported to trade repositories. 

Meanwhile in America, T+1 has created operational difficulties, highlighting data quality and transformation issues as well as poor processes and a lack of automation throughout. Resolving these issues will be relevant in Europe as well, as T+1 is expected to reach both the EU and the UK by the end of 2027. European firms need to start preparing while learning from their US peers.

Vikesh Patel, global head of clearing, and president, Cboe Clear Europe

In 2025, we anticipate renewed regulatory efforts to promote more resilient, efficient and integrated pan-European financial infrastructures. Striking the right balance between fostering growth and innovation on one hand and maintaining regulatory oversight and financial stability on the other will be essential for advancing the region’s capital markets and we look forward to Emir 3.0 helping bring this to life. Whilst we anticipate that talk of top-down consolidation for Europe’s post-trade infrastructure is likely to persist, we will continue to advocate for strengthening the existing competitive framework, particularly in cash equities through mandating true clearing interoperability for all major exchanges.

We remain dedicated to fostering a stronger and more resilient European market by continually driving innovation and equipping participants with the tools they need to drive a more efficient use of their capital, ultimately contributing to long-term growth and stability across the region.

Matt Smith, chief executive officer, SteelEye  

Following several years marked by significant fines for record-keeping breaches related to encrypted messaging apps, we expect to see a broadening focus in 2025. E-comms will remain a regulatory focus, but so too will areas such as voice surveillance. 

Voice surveillance currently represents a big gap in many firms’ communications surveillance programmes due to ambiguous regulatory rules. However, it is likely regulators will clarify expectations around voice surveillance in 2025, and financial firms should prepare for this. 

Currently, regulatory rules do not specify how voice data should be monitored which has resulted in many financial institutions simply carrying out manual reviews of a sample of voice calls, leaving a considerable gap for missed risks.  With advancements in transcription and analytics technology, voice surveillance will move from being an overlooked channel to a critical component of risk management frameworks in 2025. 

Simon Gallagher, chief executive officer, Euronext London

In 2025, the realities of increased competition from the US for capital and liquidity will be a wake-up call for Europe. On both sides of the channel, policy makers will accelerate measures to bridge the gap between the region’s vast, untapped household savings and its equity markets.

As part of this wider effort, Europe will need stronger and simpler market structures. Euronext will play its full role, making material contributions to simplifying Europe’s post-trade complexity, harmonising its fragmented ETF markets and leveraging our new clearing capability to unlock value for clients. In addition, following our recent push for a single, unified European prospectus, we will continue to proactively propose ‘bottom-up’ solutions to simplify European markets.

Under strong political leadership, I am optimistic that the region will be able to catch up with the US in funding innovation and infrastructure and in creating greater wealth for its citizens. 

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SteelEye rolls out enhanced Compliance CoPilot tool https://www.thetradenews.com/steeleye-rolls-out-enhanced-compliance-copilot-tool/ https://www.thetradenews.com/steeleye-rolls-out-enhanced-compliance-copilot-tool/#respond Mon, 23 Sep 2024 14:52:10 +0000 https://www.thetradenews.com/?p=98024 The new development leverages large language models, allowing users to prioritise high-risk alerts; the offering reduces investigation time by up to 90%, according to SteelEye.

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SteelEye has rolled out the latest enhancement to its Compliance CoPilot tool across trade surveillance.

The new development leverages large language models (LLM) to complement the role of a compliance officer through the provision of a full review of all trade surveillance alerts.

The development will allow compliance analysts at banks, brokers and investment managers to prioritise high-risk alerts, investigate them better and streamline the entire review process, which SteelEye claims to reduce investigation time by up to 90%.

The AI-powered solution provides alert scoring, prioritisation, and clear explanations of why alerts have been triggered. Recommendations for categorising and resolving alerts, complete with rationale, are also provided by the solution.

The new solution allows firms prioritise the most urgent alerts and manage their workload more intelligently, ultimately enhancing the efficiency and accuracy of surveillance functions.

SteelEye added that the tools also afford firms more time to consider where they need to strengthen their market surveillance capabilities on a broader level, with the Compliance CoPilot easily intergratable into SteelEye users’ existing workflow.

“There can be no downplaying the amount of strain compliance staff are under across the industry, with most teams overwhelmed by volumes of suspicious trading alerts to address each day,” said Matt Storey, chief product officer at SteelEye.

“The Compliance CoPilot will ensure compliance teams operate more effectively and proactively and should become the go-to sidekick for surveillance officers.”

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SteelEye expands Asia-Pacific footprint https://www.thetradenews.com/steeleye-expands-asia-pacific-footprint/ https://www.thetradenews.com/steeleye-expands-asia-pacific-footprint/#respond Tue, 12 Mar 2024 09:02:21 +0000 https://www.thetradenews.com/?p=96350 The move comes as the Monetary Authority of Singapore (MAS) continues to step up its enforcement actions across the industry.

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SteelEye has incorporated in Singapore, enhancing its reach across Asia-Pacific as it aims to enable closer collaboration with clients and regulatory authorities in the region. 

Matt Smith

Matt Smith, chief executive of SteelEye, explained: ”Fortifying our presence in APAC underscores our commitment to providing unparalleled support to our clients in the region. By leveraging our extensive experience, SteelEye’s market-leading trade and communications surveillance solutions are ideally placed to enable financial firms operating in APAC to meet their regulatory obligations effectively.”

Read more: Fireside Friday with… SteelEye’s Matt Smith 

The move comes as the Monetary Authority of Singapore (MAS) continues to step up its enforcement actions across the industry. A recent SteelEye report found that just last year four banks and an insurer were fined in a bid to tackle money laundering and market misconduct. 

The region’s regulatory frameworks are known to be stringent, requiring financial institutions to comply with a range of market surveillance rules. 

Speaking to these unique challenges, SteelEye explained that the incorporation “enhances [its] ability to provide best-in-class communications and trade surveillance solutions to financial firms in APAC.”

The firm also further highlighted the importance of recognising the parallels between the regulatory environments in APAC, North America, and Europe. 

Lately, increased activity in Singapore from both the buy- and sell-side is seemingly positioning the country as the next major trading hub, with some key initiatives having been introduced to accelerate this continued shift.

“Singapore offers obvious benefits of getting established in Asia Pacific, putting down a small footprint, and then in a relatively low-impact way, hubbing to all of the other places that you might need to visit in the region,” Gerard Walsh, global head of capital markets client solutions at Northern Trust, previously told The TRADE.

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Demand for integrated surveillance doubles as regulators up pressure https://www.thetradenews.com/demand-for-integrated-surveillance-doubles-as-regulators-up-pressure/ https://www.thetradenews.com/demand-for-integrated-surveillance-doubles-as-regulators-up-pressure/#respond Tue, 27 Jun 2023 09:27:47 +0000 https://www.thetradenews.com/?p=91411 Surge comes as SEC logged a record $6.4 billion in penalties last year.

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Integrated trade and communications surveillance has seen a 100% increase over the last year as regulators continue to ramp up enforcement actions, a SteelEye report has found.

The report’s findings come as regulators up their enforcement actions related to communications and trade surveillance on both sides of the Atlantic. In 2022, the UK Financial Conduct Authority (FCA) issued almost triple the number of fines compared the previous year.

Last year, the SEC issued a record $6.4 billion in penalties, representing a 9% increase on the previous year. Fines totalling $1.1 billion were handed out to 16 Wall Street players for failing to monitor their workers or stepping in to prevent communications via unauthorised messaging apps (such as WhatsApp).

Just last week JP Morgan was ordered to pay $4 million civil monetary penalty to the SEC following the deletion of 47 million electronic communications. It was the latest in a series of orders issued by the SEC to the bank for failure to preserve records.

Previously, regulatory reporting was found to be the highest investment priority across firms, however a year on SteelEye’s 2023 Annual Compliance Health Check Report – which surveys more than 300 senior financial services compliance and risk professionals – has found that investment in communications and eComms surveillance is now the primary focus.

Of the respondents, 77% highlighted it as a main priority for 2023, while 25% specifically identified it as the top investment focus.

Matt Smith, chief executive of SteelEye stressed the importance of integrated surveillance as compliance departments of global financial institutions face increased pressure from regulatory bodies – which continues to be exacerbated by technological advancements.

“To meet regulatory demand, financial firms need to get better at detecting potential market manipulation.” he said.

“However, they won’t be able to do that if they continue to grapple with a proliferation of data, systems, and platforms. As stretched compliance teams confront a seemingly endless list of challenges, integrated surveillance will be critical in helping firms successfully navigate an increasingly complex and data-dependent regulatory environment.”

In terms of the key challenges facing firms, views differed between jurisdictions. In the UK, managing regulatory change and dealing with regulatory queries/investigations were both highlighted as the main hurdles by respondents – each highlighted by 42% of respondents.

Conversely, in Europe, the most common challenge was found to be keeping abreast with – and implementing – regulatory change (41%).

In the US, just over 41% confirmed that the struggle with using management information (MI) was the top issue, closely followed by managing market abuse and manipulation risk challenging (39%).

Despite the recent regulatory challenges, overall, the report found that 60% of firms believe regulators are easier to deal with compared to five years ago. According to SteelEye: “These positive attitudes towards the regulator could have to do with technological advancements, which are making compliance processes more streamlined and straightforward. Equally, it could be down to more concise and clearer communication from regulators.”

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Fireside Friday with… SteelEye’s Matt Smith https://www.thetradenews.com/fireside-friday-with-steeleyes-matt-smith/ https://www.thetradenews.com/fireside-friday-with-steeleyes-matt-smith/#respond Fri, 24 Mar 2023 11:05:06 +0000 https://www.thetradenews.com/?p=89869 Following the implementation of SteelEye’s ChatGPT surveillance platform, chief executive officer Matt Smith sits down with The TRADE to explore the new and growing role of AI in compliance technology - and what this could mean for the way the capital markets operate.

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SteelEye recently implemented a ChatGPT surveillance platform, how can AI play a role in trading compliance technology?

I think the recent evolutions in AI that we’ve seen over the last year or two are really starting to be a little more profound in the context of how they may change the role of a compliance professional and how they may change the role of regulators and their expectations.

Legislation varies from region to region and by regulator to regulator but ultimately we can only improve our capabilities by incorporating AI into our strategies. I was sitting with a large European bank recently and they’re looking to replace their current communication surveillance and oversight capabilities. They’ve got an array of different systems. The future of surveillance and compliance technologies will be looking at how we rationalise the number of systems, but also how we make that workflow for the compliance professional better. You can do that through systematic rationalisations from vendor and platform perspective or you can do it from just making the day-to-day easier.

We launched ChatGPT in our system yesterday. The ability to press a button and that button to break down historic communications or even trading patterns and activity and simplify it in a way that you can digest it in minutes and then tell you the steps you should take next as well and then generate your response to the individuals, counterparties, internal and external in an automatic way – it’s profound. It’s quite scary but also exciting. It makes the whole journey for that compliance professional so much faster. In the old days, surveillance was really about reducing the false positives to make a surveillance professional more efficient. We can do that, but we can also massively reduce the time it takes to digest and understand information. This is what ChatGPT will do. This technology has only been around since November. I met with somebody a month ago and they asked what’s your strategy on ChatGPT? I thought oh my God, it’s only been around for two months. It’s fully incorporated in the product now.

It’s about simplifying the analytics of information. You can explain what’s going on in a certain chat room, what people talking about, what the thematic context of why that chat room exists. But do it in a way where I can look at a screen with a few paragraphs in each box that explains it and then tell me what I should do on the back of being able to break that information down. We’re enabling the users of the SteelEye platform to press a button and call out to the open API capability to do this.

We can provide those analytics and what that means is we can start to look at overall patterns of an individual, of an instrument, of a company. Imagine if you were able to press analyse Vodafone and it comes back and tells you everything that your company thematically has done with Vodafone, both from a trading activity perspective. Who your big counterparties are, where your risk and exposure is, who you’re trading with, what’s the overall tone and sentiment of how you interact with the counterparties?

Do you think regulators are encouraging the use of AI in compliance?

From a regulatory view, in terms of using this type of new age technology and the analytics that are available, they’re not vocally saying you should be using it. In some ways they’re saying you should be very cautious of it. You get technologies which in some cases a little too far into the AI side, but I really respect the innovation that’s coming out around the context of effectiveness of surveillance using AI. Explainability and operational efficiencies are not mutually exclusive of each other. The world is trying to get to a place where we’re starting to understand how these technologies work together. The regulator is definitely watching definitely seeing AI as being a core part of innovation. But regulators don’t want financial firms totally dependent on AI. They want a mix of computer and mix of human and this is where it really comes into how you bring these things together.

What role have the recent Wall Street WhatsApp fines played in this move towards AI in compliance?

There are a few components. Firms have been swinging from need to find ways of supervising and monitoring to just outright ban on technologies like WhatsApp. Those who have tried an outright ban will lose not from a compliance perspective, but from a business perspective, because this is how the world interacts. Whether it’s WhatsApp today or whatever it is in a year or two’s time, we’ll always have these technologies that people are using. The reason we use them is they make our lives easier; they make them more straightforward.

We’ve seen instances where big banks are being fined collectively around $2 billion where WhatsApp wasn’t being supervised. There’s technology available today to market participants to supervise this. Regulators are saying if firms are not going be in control of policy and it’s a prevalent thing in an organisation as a communication mechanism you will suffer the consequences of it. The regulators are showing is no longer OK to turn a blind eye or make excuses. As a result, this is where these fines come from. The UK regulator is different. They haven’t taken such a significant tone but that is one of the key differentiators between the US and the UK regulators. The US regulators don’t do a lot of pre-enforcement of systematic controls like the UK but when you do something wrong they hit you hard.

The key thing is we’re talking about huge amounts of information. Being able to pick up that an e-mail or a Bloomberg chat took place where somebody sent a communication trigger like “ping me on WhatsApp” and then go off and search all the plethora of communications is a way that we can use AI to start more in-depth searches. Beyond that you could then look at the trading patterns and see if something took place after that trigger an hour or two later e.g., a set of trades or a market move in a particular way. What did that person do or know? It could be nothing? It could be everything.

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Small firms are next in firing line for Wall Street communications fines, SteelEye warns https://www.thetradenews.com/small-firms-are-next-in-firing-line-for-wall-street-communications-fines-steeleye-warns/ https://www.thetradenews.com/small-firms-are-next-in-firing-line-for-wall-street-communications-fines-steeleye-warns/#respond Wed, 16 Nov 2022 10:45:18 +0000 https://www.thetradenews.com/?p=87943 New analytics tools are allowing regulators to take a more data driven approach to supervision of firms of all sizes, SteelEye chief Matt Smith told The TRADE.

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Small firms are next up to come under the firing line of regulators for communications monitoring fines, regulatory technology provider SteelEye has warned.

According to SteelEye chief executive officer, Matt Smith, new analytics tools now being used by regulators are allowing them to take a more data-driven approach to monitoring and this has brought smaller firms under the spotlight.

However, new research published by the firm claims to have found that a third of small firms are struggling to meet their regulatory obligations while 58% of small firms find the regulator challenging to deal with in comparison with 42% of firms of all sizes.

“Their resources are limited, and would of course be stretched by any regulatory inquiry,” Matt Smith, chief executive officer at SteelEye, told The TRADE. “Even the process of responding to and managing an investigation would be felt more acutely than it might be in a business with a global function.”

Several major Wall Street firms have been hit with huge fines in recent months for non-compliant communications and use of communications channels. The US Securities and Exchange Commission (SEC) confirmed earlier this week that its enforcement penalties had surged to a record in the government’s fiscal year, with its total enforcement actions totalling $6.4 billion in fines, up from $3.9 billion last year.

Fines around the use of messaging services such as WhatsApp to conduct business have largely driven this rise. Bank of America was served with a $200 million fine from the Securities and Exchanges Commission (SEC) in July relating to its use of “unapproved personal devices”, joining JP Morgan and Morgan Stanley who both also received multi-million-dollar fines from the regulator in the same month.

“For firms still establishing their footprint, a fine for non-compliance could be especially damning – financially and reputationally,” added Smith. “Given the regulator has a clear focus on off-channel communications, firms must ensure their communications policies around permitted channels are watertight, and their monitoring processes are providing them with full coverage.”

SteelEye published research in July that found that the majority of firms were not yet monitoring WhatsApp despite the recent major fines. According to the firm, only 15% of firms were monitoring communication on the social media channel.

“Any firm that might be aware of compliance failings should consider open dialogue with the regulator about the remediation steps they are taking address any shortcomings,” Smith added. “The FCA in particular has always encouraged open communication with firms, and indeed the SEC has warned broker-dealers and asset managers that they would be “well-served to self-report and self-remediate any deficiencies”.”

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SteelEye secures $21 million in Series B funding round https://www.thetradenews.com/steeleye-secures-21-million-in-series-b-funding-round/ https://www.thetradenews.com/steeleye-secures-21-million-in-series-b-funding-round/#respond Fri, 09 Sep 2022 12:05:38 +0000 https://www.thetradenews.com/?p=86628 The latest funding round brings the regtech firm’s total capital raised to date to $43 million.

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Regulatory technology provider SteelEye has raised $21 million in a Series B fundraising to accelerate its global expansion, with a focus on North America.

The funding round, led by Ten Coves Capital and existing investors Fidelity International Strategic Ventures, Illuminate Financial and Beacon Equity Partners, increases SteelEye’s total capital raised to date to $43 million.

The fundraise follows significant growth from SteelEye last year, which saw its revenues grow by 88%, and it will be used help support the company as it looks to achieve scalable expansion.

Headquartered in London and with offices in the US, India and Portugal, SteelEye provides a software-as-a-service based RegTech platform which allows firms to simplify their compliance processes across various EU, UK and US market regulations.

“Facing regulatory clampdowns, huge data volumes, and inflation impacts on budgets, financial firms need ways to reduce costs through efficiencies and automation,” said Matt Smith, chief executive of SteelEye.

“This is what we deliver through our distinctive, data-centric compliance platform. We are delighted to partner with the team at Ten Coves Capital, who have a long history of enabling technology businesses to scale and deliver real value to the financial services industry.”

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Firms are failing to effectively monitor communications as fines roll in, research finds https://www.thetradenews.com/firms-are-failing-to-effectively-monitor-communications-as-fines-roll-in-research-finds/ https://www.thetradenews.com/firms-are-failing-to-effectively-monitor-communications-as-fines-roll-in-research-finds/#respond Wed, 20 Jul 2022 12:42:38 +0000 https://www.thetradenews.com/?p=85738 Bank of America, JP Morgan and Morgan Stanley have all received multi-million dollar fines for activities relating to off channel communication on personal devices.

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The majority of firms are not yet monitoring WhatsApp despite several major institutions being recently served with major fines by regulators, research by SteelEye has found.

Just 15% of investment firms are monitoring communication on the social media channel while just 9% monitor Slack and 3% monitor Signal, a Compliance Health Check report by SteelEye has found.

Around 40% of firms monitor incumbent platforms such as Teams and Bloomberg Chat, while only a quarter monitor Zoom.

“When it comes to email and desk phones – or traditional methods of communication – record keeping and supervision rules are relatively straightforward. The emergence of new communications channels like WhatsApp, and the vast volume of data they produce, have complicated manners,” SteelEye chief executive Matt Smith, told The TRADE.

“Post-pandemic, the rise of home and hybrid working has forced regulators to prioritise the growing problem of off-channel communication. Complicating things further, digital communications monitoring also brings with it the challenge of carefully balancing compliance and employee privacy.”

Bank of America became the latest major institution to be served with a $200 million fine from the Securities and Exchanges Commission (SEC) in the last few days relating to its use of “unapproved personal devices”, joining JP Morgan and Morgan Stanley who both also received multi-million-dollar fines from the regulator in the last week.

In light of this, over two thirds of firms now rank surveillance as one of their two main investment priorities for the coming year, SteelEye found, with 41% focusing specifically on communications surveillance as a priority.

Communication channels have increasingly come under the spotlight in recent years due to increased dependence on them during the global pandemic, which saw the industry forced into remote working conditions for prolonged periods.

“Monitoring off-channel communication will undoubtedly be a priority for both regulators and compliance teams in the coming years. Electronic communications channels are constantly changing, and new platforms pose a big risk to firms, as new places where unmonitored conversations between regulated representatives can take place,” added Smith.

“The regulator is already putting pressure on firms to prioritise communications surveillance. In the short term, we anticipate more fines for failures to monitor off-channel communications, and the impact will be felt beyond tier one banks. Smaller firms and asset managers must also be aware of the risks of communications surveillance gaps, and the fines that can be issued as a consequence.”

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A year since Biden’s inauguration: Has SEC enforcement increased post-Trump? https://www.thetradenews.com/a-year-since-bidens-inauguration-has-sec-enforcement-increased-post-trump/ https://www.thetradenews.com/a-year-since-bidens-inauguration-has-sec-enforcement-increased-post-trump/#respond Tue, 22 Feb 2022 10:39:42 +0000 https://www.thetradenews.com/?p=83477 Brian Lynch, President of SteelEye US, talks to The TRADE about the changing landscape for financial regulation in the US: with a rundown of the latest changes and a look at what might yet be to come.  

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President Joe Biden

It has been a little over a year since President Joe Biden was inaugurated. While headlines during this time have focused on how his approach to climate change, foreign policy, and Covid differs from his predecessor, there is another area in which Biden’s administration has demonstrated a departure from prior strategy – namely financial regulation. 

The previous administration seemingly took a more conservative stance when it came to regulatory intervention based on a belief that fewer restrictions create a more business-friendly landscape. 

  • In 2018, President Trump signed a bill designed to ease the rules on all but the largest banks – one of the biggest rollbacks of banking regulations since the financial crisis. This included raising the threshold under which banks are deemed too important to fail and easing mortgage loan data reporting requirements. The measures aimed to boost economic growth and ease the burden placed on small to medium-sized lenders by the Dodd-Frank financial reform act.
  • Another controversial move by the administration at the time was the proposed amendments to the Exchange Act filed by the Nasdaq Stock Market together with the Securities and Exchange Commission (SEC). The proposal was to change the rules around direct listings to allow companies to offer shares to the public without going through an underwriter.  

While supporters of these changes believe that fewer regulations will breed growth, opponents claim that it comes with increased risks. 

Once President Biden was sworn in, there was much speculation that the new president would push an ambitious agenda across a range of different areas, looking to immediately rescind many of the executive orders issued by the Trump administration.  However, so far, the president has made few, if any, changes in relation to the Dodd-Frank rollback.  

There have, however, been several other influential developments under the Biden administration, notably the appointment of Gary Gensler as Chair of the SEC in April 2021.  

Under Gensler, a former investment banker at Goldman Sachs who was chairman of the Commodity Futures Trading Commission (CFTC) under Barack Obama, the SEC filed 7% more enforcement actions in 2021. Whilst this change does not imply a drastic shift in priorities, it could be a sign of policies beginning to revert to a time before Trump’s regulatory rollback. 

The appointment had Wall Street firms bracing for stricter oversight as Gensler pledged to protect investors, facilitate capital formation, and promote fair, orderly, and efficient markets – promising that the SEC would “pursue misconduct wherever it is found including on issues such as record-keeping that don’t make headlines.” And this is certainly something we have seen already. 

In December, the SEC brought one of its largest enforcement actions to date for record keeping breaches fining JP Morgan $200m for “widespread and longstanding” failures to maintain and preserve written communications. The SEC found that the bank’s employees regularly communicated about securities business matters on their personal devices, using text messages, WhatsApp, and personal email accounts.  

And now, it seems Gensler has his sights set on special purpose acquisition companies (SPACs) due to concerns over their ‘meteoric’ rise. In fact, the SEC, alongside the Financial Industry Regulatory Authority (FINRA), is currently investigating the SPAC that plans to take former President Trump’s nascent social media company public.  

Gensler has also hinted that there will be new rules and regulations to come. He has called for more regulation around cryptocurrency exchanges, including those that solely trade bitcoin and are not currently required to register with the SEC. 

As well as clamping down on financial institutions failing to meet their compliance obligations, President Biden’s administration has also strengthened the protection for whistle-blowers by signing an amended version of the bipartisan CFTC Fund Management Act.  

The Act, which came into law in July 2021, protects a whistle-blower program that was introduced to reward individuals who help root out waste, fraud, and abuse. And the impact is already being felt. The SEC paid out a record $564 million to whistle-blowers in 2021 – more than it has paid out in the last 10 years combined. It has also taken enforcement action against employers for impeding whistle-blowers from reporting misconduct to the Commission. 

The Biden administration is leaving its mark in financial regulations, but will it be able to continue to do so, and establish a legacy of regulatory reform? For the answer, it may be worth looking at Biden’s environmental track record. While he may have quickly reversed many of former President Trump’s executive orders on the environment, his recent failure to pass the Build Back Better budget suggests that Congress is a ‘major obstacle’ to his more significant and controversial ambitions, which, if the Republican Party takes either the House or Senate following the mid-term elections, will become more challenging. 

However, for now, President Biden is expected to continue to push his stricter regulatory agenda, with the support of the SEC and its pro-regulation chair Gensler.  As evidenced by the JP Morgan fine, and the record whistle-blower pay-outs, this administration is serious about “pursuing misconduct wherever it is found” and no financial institution is too big or small to get caught. Therefore, in this increasingly complex and comprehensive financial regulatory landscape, where the consequences for non-compliance are higher than ever, financial institutions must, as ever, take regulatory compliance seriously. 

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Bloomberg’s regulatory reporting head moves to SteelEye as president of US operations https://www.thetradenews.com/bloombergs-regulatory-reporting-head-moves-to-steeleye-as-president-of-us-operations-2/ https://www.thetradenews.com/bloombergs-regulatory-reporting-head-moves-to-steeleye-as-president-of-us-operations-2/#respond Tue, 05 Oct 2021 11:07:05 +0000 https://www.thetradenews.com/?p=81026 New appointment will help lead SteelEye’s commercial expansion in the North American market.

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Compliance technology provider SteelEye has appointed a regulatory technology expert from Bloomberg as president of its new US arm.

Brian Lynch will take on the role, working closely with Matt Smith, chief executive of SteelEye, and the management team to help establish the firm’s US footprint.

Leveraging his industry experience and regional knowledge, Lynch will also lead SteelEye’s commercial expansion in the North American market.

Lynch joins from Bloomberg where he most recently acted as global head of its Regulatory Reporting Services, formerly RegTek Solutions, which was acquired by Bloomberg in August 2019.

Prior to the acquisition, Lynch acted as co-founder and chief executive of RegTek Solutions.

“Brian’s experience in the industry is second to none, making him a perfect choice to lead SteelEye’s US business. Our North American clients will benefit hugely from his extensive regulatory background,” said Smith.

“Brian’s knowledge and understanding of the regulatory challenges financial firms in North America face will be invaluable. I look forward to working closely with Brian as we continue to build out SteelEye’s North American franchise.”

Lynch’s appointment follows that of Philip Lemmon, who was appointed as commercial director earlier this year, following the reveal of SteelEye’s plans to expand into the US.

To help support its expansion plans, SteelEye successfully raised $17 million in two separate funding rounds last year, led by Fidelity International Strategic Ventures and Illuminate Financial, and US-based investor Beacon Equity Partners respectively.

“I am thrilled to join SteelEye at such an exciting stage for the business. The data platform that SteelEye has created is precisely what the market needs – it is flexible, dynamic, and powerful. The ease with which clients can navigate and aggregate data from multiple and disparate sources offers so much to users,” said Lynch.

“This is especially true for firms who have struggled to extract information from the vast quantity of data that they generate on a daily basis. Everyone is looking for greater insights and SteelEye has built a platform that delivers exactly that.”

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