March 28, 2025 • 37 mins
In our feature-length season finale, Matthew Vincent (Dir. MIFIR Reporting, Kaizen) and José Manuel Santamaría, (Head Regulatory Services, BME, SIX) join our regular virtual studio crew to talk about the next huge wave of regulatory change - MIFIR 2024. With far-reaching implications for market participants in non-equity instruments and equities, could 2025 signal even more disruption than EMIR Refit last year? Join Andrew Keith Walker, Nick Bruce and John Kernan for another lively show going in-depth and under the hood of the latest Regtech news.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:06):
you're listening to the registry, our roundup, which
is brought to you by the sixgroup and features members of
registry, our team and specialguests featuring their personal
opinions not the opinions ofregistry are.
As an organization, there's norepresentation made as to the
accuracy or completeness ofinformation in this podcast and
nor should it be taken as anylegal, tax or other professional
advice.
Yes, we are back and it's theseason finale, actually, of
(00:34):
series 10.
Can you believe that?
10 series in?
And I'm looking at a screenfull of very fresh-faced,
good-looking middle-aged men.
Right now, only the ones who'vehad to work with me every week
for the last five years haveaged beyond their years, and
that is, of course, starting inno particular order.
Introducing our virtual studiocrew this week and starting with
(00:57):
the voice of reason himself,the head of business development
, the very sprightly andyoung-looking Mr Nicholas Bruce.
Nick, welcome back.
Speaker 2 (01:04):
Good to be back, andrew, and yeah, thank you for
that.
I don't feel sprightly andyoung looking, but I'll take
that definitely okay, now youlook good.
Speaker 1 (01:11):
Well, I see you've been doing a fair bit of
traveling as well.
You're just back, aren't youfrom, uh, the derivatives event
in frankfurt?
How was that?
Speaker 2 (01:18):
really good, really good event.
Um really well attended.
Um great, just to connect withclients again as well and just
to get back out there.
So it's yeah, we're going intoa busy time, busy season.
So on the road Brussels nextweek, I think, amsterdam the
week after as well.
So it's all good.
Speaker 1 (01:35):
Good.
So you're hitting Europe hard.
And that leads us to the otherperson who's aged prematurely
from too much podcasting.
It is, of course, the man whoused to put the canary in the
wolf, and then he was inDevonshire and never square.
He now looks after St Mary'sAxe.
It is none other than the CEOof Registriar in the UK and
longtime contributor, brexitreporter to Mr John Kernan.
(01:58):
John, welcome back.
Speaker 3 (01:59):
Thanks, andrew, great to be back.
Speaker 1 (02:01):
Feels like ages since I've been on, but very happy to
be here with thesedistinguished guests and nick,
of course indeed, and whatguests we have as well, because
joining us, uh, to go in depthand under the hood with uh mafia
2024, yes, the next wave ofregulatory change is upon us,
(02:23):
and joining us for that we haveMatthew Vincent.
Now, matthew, you will probablyknow if you've done anything in
and around the world of MIFIA,mifid regulatory reporting with
any of the major players overthe last 20 years or so, you
will know Matt Matt is ManagingDirector at Kaizen Reporting.
He brings nearly 30 years ofexperience in financial services
(02:45):
to bear now in his regulatoryconsulting work there.
Prior to joining Kaizen, heserved as Director of Regulatory
Reporting Strategy at theLondon Stock Exchange's Univista
platform and he's also beenhead of MIFID Regulatory
Reporting at Credit Suisse andhad positions at Barclays
Investment Bank, citigroup andDeutsche Bank.
He also chairs the UK FinanceTransaction Reporting Working
(03:07):
Group over the last 10 years andhe's serving on the
Consultative Working Groupsupporting ESMA's Market Data
Reporting Working Group.
That's a hell of a CV, frankly.
Matthew Vincent, welcome to theshow.
Speaker 5 (03:20):
Thank you very much.
When you say 20 and 30 years,that also has horribly long
periods of time.
Speaker 1 (03:25):
Well, it's tough sometimes, because I started
with 20, but then on LinkedIn itsays 30.
And I thought, ok, fine, we canfact check that you don't look
like it could be 30.
Speaker 5 (03:36):
I was in Paris last week on a geek and it said 30
years since Eurostar and Ithought, God, I can't believe
it's 30 years ago since theyopened that thing and I ventured
on it for the first time.
Speaker 1 (03:50):
Wow, now you said that.
That's it now I'm just going toretire after this recording and
also joining us.
We have a very special guestJoining us, from BME6, jose
Manuel Santamaria Jose.
Welcome to the show.
Speaker 4 (04:05):
Thank you very much, alu.
Thanks for having me it's agreat.
Speaker 1 (04:08):
It's great to have you on board and, of course, uh,
everyone uh will probably knowyou if they've interacted with
bme or six over the last 17years or so.
Uh, you've got a lot ofexpertise in capital markets, uh
, extensive experience,encompassing various leadership
roles within the financialindustry, focusing on market
operations and infrastructure.
You run the Maffia reportingbusiness, of course, and you
(04:31):
have regulatory reporting roleshere.
You used to chair the EquityCommittee at the Federation of
European Securities Exchangesand, of course, you were an
analyst at Deloitte as well.
So, between you and Matt, we'vegot this whole thing covered
and I expect you to ask somereally tough questions to Nick
and John just to keep them ontheir toes there.
Talking of which, yeah, thanks,good, all right, I'm going to
(04:55):
enjoy this.
I suppose, moving on, everyone'ssort of breathing a sigh of
relief now that EMEA seems to beover and the big disruptions
that were felt industry widewideuh sort of calming down and and
it seems like things werestarting to look a little bit
better on the regulatoryreporting front.
And then 2024 amendments toMIFIR uh come along, supposed to
(05:18):
enhance transparency andnon-equity instruments uh, as
well as equities.
Um, we, we all know thatimplementing these changes is
going to require somesignificant adjustments in
reporting systems and processes.
We should be used to that bynow.
So I want to kick off by askingthe sort of the big picture
question is this just anotherbig compliance headache that
(05:39):
will pass?
Or is it a long overdue refitthat's addressing shortcomings
in original sort ofspecifications for uh, mephia in
much the same way that a mererefit sort of came in and did
that for the aging legislationthere, and I'd like to start
that one off.
I'm going to fight that oneover to you, matt sure.
Speaker 5 (06:01):
So I'll.
I'll talk to the transact.
So the mifia review covers lotsof bits and pieces.
Um, I'll talk to to the mifiareview, sort of on the rts 22.
So the transaction reportingand I think the question was, is
it, you know, improving whatwe've already got from esmer?
And I would say probably notimproving, but it's absolutely
(06:25):
adding to the burden that isplaced on investment firms to
send data to their EU NCAs.
There's not a lot in there thatis, I would say, focused on
improving the data quality andthe accuracy of the data that
the NCAs currently get.
So it's going to be a bigchange.
It's going to be lots of workfor firms to add data to those
(06:51):
transaction reports to send toESMA.
And that's on what we'vecurrently seen in a draft RTS22.
So I don't think they're goingto suddenly axe it back, but the
draft says lots more change tocome.
Speaker 1 (07:06):
Jose, I want to come to you on this one From your
side, working obviously in a bigsecurities exchange and
obviously with oversight andconnections into trade
repositories as well.
What does it look like fromyour side?
We've heard from Matt about thechallenge for market
participants.
What about from theinfrastructure side side?
We've heard from Matt about thechallenge for market
participants.
What about from theinfrastructure side?
Speaker 4 (07:27):
I tend to concur absolutely with what Matt just
said.
There's nothing really newaimed at improving really the
vision or the view that theregulators would get from the
markets.
I would not only touch upon theRTS-22, on the transaction
reporting, which for sure Ishare absolutely what has been
(07:50):
said.
I don't really know if this isgoing to be really useful or
more useful for the regulators,you know, to gain access to
what's going on.
But I would also like to touchupon the RTS-1 and 2, which is
not that much related to thetransparency sorry, to the
(08:10):
integrity of the market, whichis much more on the side of the
transaction report ininfrastructures as Registria or
BME regulatory services are, butmainly on the transparency side
.
If we dive a bit into the newregime, bring broad forward on
(08:31):
the RTS1 and RTS2 for equitiesand bonds, it's kind of a
nightmare, so to speak,especially when you go into the
details of the federalpublications for transparency.
It is well intended, I wouldsay, and it intends to
standardize it a bit and to makeit more normalized throughout
(08:57):
the European Union.
But in the end it is creatingkind of a monster which is not
that easy to comply with or noteasy to implement.
So from the industryparticipant side.
I would say it will certainlybe a challenge and it will be
for sure as well for theinfrastructures.
Speaker 2 (09:17):
It sounds to me very similar to the discussions we
were having around EMEA refit.
Where there's a debate, it'sthe increasing of fields Is that
actually going to lead toimproved data quality?
And we know that the challengethat the market had as a whole
to manage those changes andactually something that Jose Mar
(09:39):
mentioned was about, you know,the end goal is to harmonize,
but I've also then heard thatpotentially there's going to be
a move from XML to JSON, sowe're then actually changing the
format of you know, of how youinstruct Now then does that mean
we're then going to see thatretrofitted to other reporting
regimes?
(09:59):
And if that's the case, youknow, we're just in this
continual cycle of of refits andadaptations to the existing
regulations, and that is a realchallenge for everyone in the
industry because that puts sucha cost burden, you know, on the
industry.
Um, and that for me, I findthat really interesting.
I I'm just looking at what willbe the final spec in that
(10:20):
direction of travel yeah, Ithought that was interesting.
Speaker 3 (10:22):
I mean, I have a slightly different perspective,
I suppose on EMIR refit, thatyou could argue that the
introduction of additionalfields actually tightens the
regulation, so there's kind ofless ambiguity there, which
somehow does improve dataquality.
Now again, like you, nick, I'malso not an expert on um myth
(10:45):
here, but I'd be interested toknow if, if actually the
additional fields would doexactly that remove, remove some
of the ambiguity in thereporting standard in terms of
eliminating ambiguity, barelycertain that there is not a
single new thing in thatdocument that eliminates
ambiguity.
Speaker 5 (11:05):
It adds it is entirely additive.
The only thing it removes andthere'll be a a silent cheer
when the podcast goes out is theshort-standing flag is removed.
So that is a huge burden, costof fortune to implement and
they've taken it away.
So that that's excellent, thatthat's good news.
I'm just trying to think of thevarious bits of the question,
(11:28):
andrew, so if I miss a bit, thenpick me back up.
So then the other bit, I think,was the go live and the date.
So we are currently, or we wereexpecting final text on my
birthday, march the 31st.
However, rumour has it thatwe're no longer expecting final
(11:49):
text on March 31st.
That's now pushed into June,july, august, where I think most
of Europe and certainly most ofthe UK will be off.
We're also hearing that theimplementation date won't slip
out.
So we've got waiting longer forthe actual text, but the
(12:11):
implementation date will stillbe end 26, early 27.
And one final point a lot ofwhat they've put in the text
requires guidelines.
Lot of what they've put in thetext requires guidelines, and
the guidelines, if history isour guide always come out after
the text they put to betranslated into.
(12:33):
There would be written and thentranslated into 27 languages or
thereabouts, and then they'llget produced.
So I've got a feeling thatthere'll be a panic.
Not panic, that's not the rightword.
Firmers will make a start, dowhat they can, but without the
guidelines to give the actualfinal detail about what goes in
what box and when, theimplementation will not go well
(12:57):
because they simply won't knowwhat to do.
Speaker 3 (12:59):
The implementation will not go well because they
simply won't know what to do.
I was looking at the process,you know, with my UK hat on, and
it struck me that there wasmaybe a different calendar for
the UK.
I think the discussion paperconcluded in February if I'm not
mistaken concluded in Februaryif I'm not mistaken and that
(13:23):
we're expecting a consultationpaper sometime later this year.
But then what you justdescribed with regard to the EU
process and obviously you've gotthe element of the translation
in member states, etc.
So I'm working on a basis thatwe probably got these dual
calendars, a bit like refit,where we had what was it?
Five months between the tworegimes, and am I wrong to
(13:47):
assume that would be the case?
Speaker 5 (13:49):
No, joe, you're absolutely right.
So the calendars sort, I mean,best guess is the calendars
align.
And you will be I think will bein a similar situation to refit
, as in ESMA will go first andUK will follow, or UK will go
first and ESMA will follow, butit feels very refit-like at this
(14:11):
point.
Fca have got DP, as you said,we've then got CP, we've then
got policy statement and we thenhave implementation period.
Speaker 3 (14:21):
So they're aligning, but they're not aligned yeah, so
there's there's pros and conswith that.
Right, you know it's alwaysgood to avoid the big bang.
Um.
We saw with uh refit in in theuk that we certainly benefited
from learning from some of themistakes.
(14:42):
Likewise, our clients were inmuch better shape because,
although there was some um smalldivergence between the two
regimes, you know, they wereeffectively in production for
five months before before theyhad to um go live in the UK.
Then some of our larger clientsmay not share that view because
(15:04):
they're then having to maintaineffectively two different sets
of regulatory standards inparallel across the channel.
Speaker 5 (15:13):
This is a bit speculative, but I'll say it
anyway.
So up until the politicalpolitical landscape I think has
changed quite a bit as wellsince all of this process
started mifia review, um,financial services and markets
act 2033, etc.
And the ceo of the fca was onlinkedin this morning as being
(15:35):
in europe yesterday and we neverheard any of that until
recently.
And there's been a couple oflinkedin posts on fca are
talking to esmer.
So I don't think that's goingto make a radical difference,
and I'm just put it.
It's just something that's.
The temperature has changed inthe last three months.
So that sort of divergencepiece, that timelines timelines
(15:57):
piece, that you know, are wegoing to go left at the road
traffic lights and Esmer goright?
It reads like that today, butthere's plenty of time for that
divergence bubble to emerge.
So quite how far we go rightand how far they go left really
is yet to be decided.
I mean presumably on that front.
Speaker 1 (16:20):
The thing to be avoided is no one wants a sort
of dual track reporting regimewhere you're actually having to
report the same data into twodifferent authorities and two
different structures andpotentially, as Nick's raised,
some of it in JSON, some of itin XML.
I mean that sounds like a technightmare to me.
Speaker 5 (16:39):
Yeah, as it currently stands, it looks like there's a
hard left and a hard right, butwe just don't know.
And someone's going to come outthe gate first, but there's
always going to be someonefollowing behind.
So we just at the moment don'treally know how much divergence
there will be and how much FCAwill say what they said they
(17:02):
were going to do reducecomplexity, improve
competitiveness and make thingsgenerally overall better.
Speaker 1 (17:10):
I realize this isn't really a TR issue, so it's
probably not fair for me tothrow this at Nick and John, but
I'm going to throw it in anyway.
Consolidated tape this soundsvery exciting.
I wish I had some of that in myshed.
It sounds like you know reallyhigh powered stuff.
No, consolidated tape this is.
There's quite a lot of jargonin here.
We've got, you know, systemicinternalizers.
We've got consolidated tape inequities that's going to move
(17:33):
over to non-equities and thatseems to be doing something
quite challenging for marketparticipants to validate their
own data and what have you, andcreate this sort of golden
source, which I know, nick, youoften talk about the golden
source as being something that'svery hard to achieve or attain
in the one in the cloud.
Okay, so is this the movetowards the golden source?
(17:54):
Is that what the consolidatedtape issue is, and is that going
to mean something for thederivatives industry?
Matt, yeah, consolidated tapeissue is, and is that going to?
Speaker 4 (18:02):
mean something for the derivatives industry, matt.
Oh, thank you, I think.
Andrew, when you refer to thegolden source, I would ask you
in return the golden source ofwhat for what?
Because what's what seems to beabsolutely inexputable now is
that the consolidated tape willnot be useful at all for trading
(18:25):
purposes.
So, in my view, what seems abit unbalanced is the huge
effort that you mentioned thewhole industry is going to
deploy to set up not only one,but three different consolidated
tapes one for equities, one forbonds and another for
derivatives.
(18:47):
Huge cost, massive cost to setup these consolidated tapes with
, I mean, I would say, limiteduse, limited case usage for the
users of the tape.
By the way, as you know, andcontrary to what happens in the
reg, nms in the States, there isno obligation for users to
(19:12):
consume this data, which I meanmight end up with very, very,
very low usage of theconsolidated tape data.
There is no obligation neitherto refer to this data in order
to find where, for example,where the best execution is in
(19:37):
real time.
And there is also a latencyissue which I know this has been
worked out very heavily by allcontenders of C-frame tapes.
But in any case, given the longdistance between the more
distant points in Europe.
The latency with which thewhole market data will be put
(20:01):
together and consolidated andthen disseminated to the wider
industry makes it non-usable atall for trading purposes.
And may I remind you all thatthe main, you know, use case
that was said at the beginning,or that was used as a main motto
for putting forward thisconsolidated tape, is offering
(20:28):
wider and fuller transparencyinto the European market in
order to ensure the bestexecution is findable, that
trading can be done at thelowest cost possible.
And we are seeing that this isnot going to be a real use case.
So that's on the one part.
(20:51):
And then, as the rest of theguys here mentioned before,
there is here again an issuewith the timelines.
We are watching.
I say we in the European Union,three different types are
expected, with three differentlaunches of them, with three
(21:11):
different launches at the sametime of selection processes, of
selection processes.
So I mean again, I'm not surethis is going to solve really
the data issue or the you knowtheoretically issue with the
data that has been making somuch noise in the last years.
Speaker 1 (21:32):
Is this push for greater alignment actually
making the job of reporting,both for the regulators and
trade repositories marketparticipants?
Is it actually making anyonejob of reporting, both for the
regulators and traderepositories market participants
?
Is it actually making anyone'slives easier or is it
unnecessary complexity, matt, ohwow.
Speaker 5 (21:51):
I think in the transaction reporting space, it
is very disappointing that thereappears to be no attempt to fix
existing issues for dataquality.
So we forgive the plug.
We test for data quality.
New firms to us still have75-80% error rates on onboarding
(22:15):
.
Regulators are still reachingout to clients, to their
submitting firms, to say yourdata quality is not good, please
fix it.
And it's seven years.
In 2018 is now seven years ago.
The back reporting volumes arevast, still as a percentage.
I don't know how you guys seeit on your arm, but my general
(22:39):
knowledge of arms is it'smassive.
As to what's correcting at theregulator, so I think, from
making things better, makingthings simpler, improving data
quality, the esmer text as itcurrently stands is
disappointing that nothing hasbeen addressed.
They've just added more stuffto get wrong, if you like.
(22:59):
On top of the existing burden,there is some element of
harmonization.
They're changing the fieldnames to reflect the same field
names as EMEA and SFTR.
So that is a tweak, it's ahousekeep, a, it's a dusting the
top shelf, um.
(23:21):
And there is some element ofcleaning up some of the
reporting in the derivativespace.
So they've aligning the use ofthe buy sell fields, the
direction.
So there is some gentle move tomake things look a little bit
like emir, but that's not really.
There's a lot more they couldhave done to sort out data
(23:42):
quality issues and that I thinkis the biggest divergence is
that FCA have gone to market tosay what can we do to sort out
data quality?
What problems have you got?
Here are some of the problemswe know about and we've got and
we'd like to solve for, whereasESMA haven't done that and it's
(24:04):
just a bit of a shame.
Now, whether the SCA take anyof that on board and do anything
about it, of course I couldn'tpredict or tell, but it was a
much, a tangibly differentapproach in the UK and on the
ESMA side.
Speaker 3 (24:21):
Yeah, I think it was interesting as well.
I know it wasn't strictlyspeaking data quality issue, but
you know when we're talking,we're talking about the maturity
of the regulatory regime and,uh, you know, market
participants compliance withthat.
It's probably interesting tonote that in january this year,
um a firm was fined by the fca Ithink it was the first fine
(24:45):
post-brexit for mifiatransgressions and I think a
firm was fined a hundredthousand pounds for
non-reporting of cfds.
And then also, which is always,what do they call it?
Sorry, what's the word I'mlooking for?
Exaggerating factor.
It's not.
Speaker 1 (25:06):
Exacerbating or mitigating.
Speaker 3 (25:11):
No, it's the opposite .
But anyway, not telling theregulator Exactly, yeah, okay,
so a firm would find 100,thousand and an element of that.
I think that there's like amultiplier in the sanctions
regime, um for not proactively,um notifying um the regulator of
(25:33):
the of the emission.
So uh, yeah, I just thoughtthat was.
That was interesting to know.
Speaker 2 (25:39):
So it's not, it's not even data quality, it's a in
some cases it's it'snon-reporting altogether we keep
using this word harmonization,but I've said it before, when
everyone's got a differentflavor of harmonization, it's
not harmonization.
So you know, there we've seentoo much deviation across the
regulations.
You know, and you've seenyou're seeing different
approaches.
You're seeing too muchdeviation across the regulations
(25:59):
.
You know, and you're seeingdifferent approaches.
You're seeing an EU approachfor more data.
You're seeing, you know, in theUS potentially going the other
way as well.
And it's what data do youreally need to understand and be
able to assess systemic risk?
So what do you actually need?
I actually think it's gettingmore complex and it's getting
harder.
And this is why, you know, weoften sit and talk about and
(26:21):
you've mentioned it already,andrew this kind of golden
source.
You, you know, as we move tolike common data fields, do you
really need to report it?
Couldn't the regulator justpull that data?
If it's common data?
Could you have this goldensource where people or the
regulators, the ncas, could justpull what they needed, the
reports out and when?
But I just think it's beengetting so complex.
You just can't see a path tothat at the moment because the
(26:45):
burden of the build and theexecution I just can't see
anyone having the time or theinclination or taking the risk
of owning it.
So at the moment I think theheart's in the right place and I
think the intention is correctand it is about ensuring that
the data is there and it'scorrect.
But I actually think that theburden's increasing and the
(27:06):
complexity isn't necessarilyhelping Because, to Matt's point
, we're seeing a lot of clientsnow that are having to
back-report.
We're seeing that a lot ofpeople have been struggling with
their data and with theirreporting, certainly in reef you
know from mere sightings, refitgo live.
So there have been a lot ofdownstream problems that are
(27:26):
only now starting to beaddressed okay.
Speaker 1 (27:29):
Now, sadly, we have to start drawing this season
finale to a close here, and youknow we love to end on a big
finish, and I have a big finishquestion, something we can
discuss no doubt long intoseason 11.
Manuel, yes, we're doing season11.
And that is, of course, regtechplays a critical role here,
(27:53):
doesn't it, matt?
You've actually written quiteextensively about this idea that
the new MIFIA reportingrequirements necessitate
advanced technological solutionsto address all these points to
do with cost per transaction, todo with volumes, to do with the
ability to keep pace with theregulation and all those
requirements.
So why don't you kick us off?
(28:14):
Is this the time where you know, we know, that the regulatory
burden will only get heavier?
The tech is catching up andfirms are catching up with their
own internal tech.
Is this going to be a sort ofgolden age of regtech?
Speaker 5 (28:30):
I don't see a lot of structural change in the firms
and new radical solutionstechnically to get around the
added burden of the regulatoryreporting, because a lot of it
is guidelines and interpretation, which, unfortunately, is not
(28:53):
easy solved, although AI must beable to solve it because it
solves everything.
But no, it doesn't solveinterpretation and guidelines,
guidance, and that's where a lotof this new burden is going to
come from.
That said, you know we're afintech firm.
We automate testing and we dosomething that it is much
(29:16):
cheaper for one specialist firmto do than lots of other firms
all trying to individually buildout, and I'm sure we'll see
stuff from infrastructureproviders like the arms, and
we'll see stuff from some of theintermediary firms who will do
what they can to try and solvesome of these problems and help
(29:38):
firms make the reporting andreduce some of that internal
individual build acrossindividual Ethereum investment
firms.
But there's one thing and thismay be a bit controversial the
regulators themselves couldsolve a lot of these problems a
lot of problems with backreporting and data quality
(29:58):
correction by offering aone-stop service that corrected
the data in the database.
Great, there's a lot of peoplein the middle making money out
of back reporting and theregulator could just simply
update the database once cleanly.
(30:19):
But that isn't happening.
That doesn't, isn't allowed andthat's a bit controversial.
But god, you could stop a hellof a lot of back reporting and
cost on the industry if that wasthe case on on that point I'm
going to dive in with j Ma.
Speaker 1 (30:34):
I got to ask you is this are you going to be
replacing Nick and John with AIanytime soon?
Basically, will there be robotssitting here?
Because what Matt said, as hesaid, I did think to myself.
If we're talking about naturallanguage and processing and
interpretation, clearly AIdoesn't think, and we know.
It's really just very, verygenerative.
Ai is just very advancedpredictive text with big uh
(30:56):
language models behind it andneural nets that predict the
likely meaning of things, andthey do definitely get things
wrong.
But could that be a technologythat starts to find its way into
the operations of big marketinfrastructures like bme6?
Speaker 4 (31:14):
yeah, why not?
I mean, you can train largelanguage models with lots of
stuff, lots of different typesof regulatory issues, but, as
Matt just mentioned, there is abig, big space for
interpretation of the rules andthere I'm not sure if the AIs
can play a differential rolethere.
(31:38):
In any case, let me stick tovery basic statements which I
can't get rid of when discussingthese sort of things.
In the end, I don't reallythink it is about AI regtech or
whatever you want to call it.
I mean, it technology is not agoal in itself, but I mean I
(32:01):
think it would be as useful asit helps really clients and
industry players to comply withthe requirements.
In the end, let's not forgetthat.
Uh, you know, the ultimate goalof obliged entities is to
demonstrate that they comply,but sometimes they do not get
(32:25):
any real value out of thatcompliance with the regulations,
except the compliance in itselfand the avoidance of fines and
these sort of things.
So I would say it doesn'treally matter if it is AI or
whatever.
The clients would opt for thesolutions that better you know
(32:47):
suit their needs.
Speaker 1 (32:50):
Great, thank you.
Well, sadly, that is it.
We have to draw season 10 to aclose without me even name
dropping my uh book published ayear ago creativity how to
rework, rethink and reimaginewith generative ai.
Do check it out, it's in allgood bookstores.
Um, I won't mention that andwhat we will do, in fact, is
(33:11):
give a huge virtual studio.
Thank you to our guests.
Oh, and, incidentally, beforewe do that I do want to mention,
because it's very importantthat you know, uh, on the 2nd of
april, uh, we suggest that youare, um, okay, but before we go,
I do want to mention that onthe 2nd of april, uh, there is
the f-i-s-d uh madrid, which isat the beautiful Palacio de la
(33:35):
Bolsa, bme's headquarters there,and it is going to be a really
important meeting talking aboutlatest trends, shaping the
financial data landscape.
Ai is going to be on that topic.
If you like what you heard inthe show there, you've got to
hear a bit more of this, jose.
Tell us a bit more about it.
Speaker 4 (33:56):
Yeah, sure, you know, FISD is the global forum for
industry participants to discussaround market data issues.
There will be some nicediscussions around reasonable
commercial basis, which issomething we have not touched
upon today, but it's amazing andit's triggering the lowest
(34:16):
passions through the wholeindustry in Europe, with lots of
articles, lots of posts onLinkedIn, articles in the press
and so on and so forth.
There will be some discussionsaround technology, for sure.
Ai and our CEO, Juan Flames,will deliver the opening speech.
So I invite you all to go thereand to join us to have a nice
(34:38):
evening.
Speaker 1 (34:39):
Okay, so make that date in your diary for April 2nd
John.
Speaker 3 (34:45):
Seeing as we're doing plugs, I'd also like to give a
quick plug.
So, registar UK, we're holdinga client breakfast event for our
clients on the 6th of may,where we'll be taking a look
back at the last eight months orso since the implementation of
refit and we'll be talking aboutsome, uh, exciting new
(35:08):
functionalities that that willbe rolling out.
Um, and I think actually you'realso planning similar for
Luxembourg and Frankfurt clientsNot Luxembourg and Frankfurt
clients, but those locations, Ibelieve.
Speaker 1 (35:22):
All right, good, that's good.
Yes, make sure you join Johnfor that.
That'll be turning up.
No doubt We'll get an update onthat, possibly some live
interviews coming to you, liveon direct from the client event.
Fingers crossed, I'm looking atManuel, please.
I desperately need to get outof this studio On that front,
just because I need some sun.
It's been nice weather On thatfront.
(35:46):
All that remains is to give ahuge virtual studio.
Thank you to our very specialguests, starting in no
particular order.
Big thank you to Jose ManuelSantamaria, who is the head of
the ARM reporting business atbme6.
Jose, thanks for joining us,thank you, my pleasure.
And a huge thank you to matthewvincent, director of mafia
reporting at kaizen.
Matthew, thanks very much.
(36:06):
Say hi to tim for us too, wewill do.
Thank you, great, okay, that'sgood.
And of course we have have tothank my long-suffering and very
youthful colleagues, of coursethe voice of Reason himself and
my most regular co-host, mrNicholas Bruce.
Nick, thanks a lot.
Speaker 2 (36:25):
Thank you, Andrew, and a huge thank you to Matt
Jose Mar.
I really enjoyed the show andthank you for joining us.
Speaker 1 (36:33):
I really enjoyed the show and thank you for joining
us and also a huge thanks to theever youthful and, you know, a
very well-travelled, as he movesbetween Europe and the UK
effortlessly, like pre-Brexitexport, mr John Kern.
John, thanks very much.
Speaker 3 (36:50):
Thank you and, like Nick said, thank you also to the
other panelists.
It's, uh, it's been a realeducation for me and, uh, I've
enjoyed it thoroughly.
Speaker 1 (37:00):
Thank you join us on our linkedin channel, that's
linkedincom slash company, slashregis hyphen tr, where you can
network with matt and with josemar and with nick and with john
and even with me and everyoneelse who's been on the show, uh,
over season 10, and we will beback for season.
Who's been on the show overseason 10.
And we will be back for season11.
I guess, in the meanwhile,that's just a big goodbye from
me, andrew Keith Walker, andfrom the studio producer, manuel
(37:24):
Moreno-Garcia.
I know Manuel doesn't normallycome on the mic, but Manuel,
thanks very much.
Thank you so much.
Okay, we're off for our springbreak.
Have a good few weeks, have asafe few weeks and we'll see you
in a few weeks.
Speaker 2 (37:42):
Bye-bye.
you're listening to the registry, our roundup, which
is brought to you by the sixgroup and features members of
registry, our team and specialguests featuring their personal
opinions not the opinions ofregistry are.
As an organization, there's norepresentation made as to the
accuracy or completeness ofinformation in this podcast and
nor should it be taken as anylegal, tax or other professional
advice.
Yes, we are back and it's theseason finale, actually, of
(00:34):
series 10.
Can you believe that?
10 series in?
And I'm looking at a screenfull of very fresh-faced,
good-looking middle-aged men.
Right now, only the ones who'vehad to work with me every week
for the last five years haveaged beyond their years, and
that is, of course, starting inno particular order.
Introducing our virtual studiocrew this week and starting with
(00:57):
the voice of reason himself,the head of business development
, the very sprightly andyoung-looking Mr Nicholas Bruce.
Nick, welcome back.
Speaker 2 (01:04):
Good to be back, andrew, and yeah, thank you for
that.
I don't feel sprightly andyoung looking, but I'll take
that definitely okay, now youlook good.
Speaker 1 (01:11):
Well, I see you've been doing a fair bit of
traveling as well.
You're just back, aren't youfrom, uh, the derivatives event
in frankfurt?
How was that?
Speaker 2 (01:18):
really good, really good event.
Um really well attended.
Um great, just to connect withclients again as well and just
to get back out there.
So it's yeah, we're going intoa busy time, busy season.
So on the road Brussels nextweek, I think, amsterdam the
week after as well.
So it's all good.
Speaker 1 (01:35):
Good.
So you're hitting Europe hard.
And that leads us to the otherperson who's aged prematurely
from too much podcasting.
It is, of course, the man whoused to put the canary in the
wolf, and then he was inDevonshire and never square.
He now looks after St Mary'sAxe.
It is none other than the CEOof Registriar in the UK and
longtime contributor, brexitreporter to Mr John Kernan.
(01:58):
John, welcome back.
Speaker 3 (01:59):
Thanks, andrew, great to be back.
Speaker 1 (02:01):
Feels like ages since I've been on, but very happy to
be here with thesedistinguished guests and nick,
of course indeed, and whatguests we have as well, because
joining us, uh, to go in depthand under the hood with uh mafia
2024, yes, the next wave ofregulatory change is upon us,
(02:23):
and joining us for that we haveMatthew Vincent.
Now, matthew, you will probablyknow if you've done anything in
and around the world of MIFIA,mifid regulatory reporting with
any of the major players overthe last 20 years or so, you
will know Matt Matt is ManagingDirector at Kaizen Reporting.
He brings nearly 30 years ofexperience in financial services
(02:45):
to bear now in his regulatoryconsulting work there.
Prior to joining Kaizen, heserved as Director of Regulatory
Reporting Strategy at theLondon Stock Exchange's Univista
platform and he's also beenhead of MIFID Regulatory
Reporting at Credit Suisse andhad positions at Barclays
Investment Bank, citigroup andDeutsche Bank.
He also chairs the UK FinanceTransaction Reporting Working
(03:07):
Group over the last 10 years andhe's serving on the
Consultative Working Groupsupporting ESMA's Market Data
Reporting Working Group.
That's a hell of a CV, frankly.
Matthew Vincent, welcome to theshow.
Speaker 5 (03:20):
Thank you very much.
When you say 20 and 30 years,that also has horribly long
periods of time.
Speaker 1 (03:25):
Well, it's tough sometimes, because I started
with 20, but then on LinkedIn itsays 30.
And I thought, ok, fine, we canfact check that you don't look
like it could be 30.
Speaker 5 (03:36):
I was in Paris last week on a geek and it said 30
years since Eurostar and Ithought, God, I can't believe
it's 30 years ago since theyopened that thing and I ventured
on it for the first time.
Speaker 1 (03:50):
Wow, now you said that.
That's it now I'm just going toretire after this recording and
also joining us.
We have a very special guestJoining us, from BME6, jose
Manuel Santamaria Jose.
Welcome to the show.
Speaker 4 (04:05):
Thank you very much, alu.
Thanks for having me it's agreat.
Speaker 1 (04:08):
It's great to have you on board and, of course, uh,
everyone uh will probably knowyou if they've interacted with
bme or six over the last 17years or so.
Uh, you've got a lot ofexpertise in capital markets, uh
, extensive experience,encompassing various leadership
roles within the financialindustry, focusing on market
operations and infrastructure.
You run the Maffia reportingbusiness, of course, and you
(04:31):
have regulatory reporting roleshere.
You used to chair the EquityCommittee at the Federation of
European Securities Exchangesand, of course, you were an
analyst at Deloitte as well.
So, between you and Matt, we'vegot this whole thing covered
and I expect you to ask somereally tough questions to Nick
and John just to keep them ontheir toes there.
Talking of which, yeah, thanks,good, all right, I'm going to
(04:55):
enjoy this.
I suppose, moving on, everyone'ssort of breathing a sigh of
relief now that EMEA seems to beover and the big disruptions
that were felt industry widewideuh sort of calming down and and
it seems like things werestarting to look a little bit
better on the regulatoryreporting front.
And then 2024 amendments toMIFIR uh come along, supposed to
(05:18):
enhance transparency andnon-equity instruments uh, as
well as equities.
Um, we, we all know thatimplementing these changes is
going to require somesignificant adjustments in
reporting systems and processes.
We should be used to that bynow.
So I want to kick off by askingthe sort of the big picture
question is this just anotherbig compliance headache that
(05:39):
will pass?
Or is it a long overdue refitthat's addressing shortcomings
in original sort ofspecifications for uh, mephia in
much the same way that a mererefit sort of came in and did
that for the aging legislationthere, and I'd like to start
that one off.
I'm going to fight that oneover to you, matt sure.
Speaker 5 (06:01):
So I'll.
I'll talk to the transact.
So the mifia review covers lotsof bits and pieces.
Um, I'll talk to to the mifiareview, sort of on the rts 22.
So the transaction reportingand I think the question was, is
it, you know, improving whatwe've already got from esmer?
And I would say probably notimproving, but it's absolutely
(06:25):
adding to the burden that isplaced on investment firms to
send data to their EU NCAs.
There's not a lot in there thatis, I would say, focused on
improving the data quality andthe accuracy of the data that
the NCAs currently get.
So it's going to be a bigchange.
It's going to be lots of workfor firms to add data to those
(06:51):
transaction reports to send toESMA.
And that's on what we'vecurrently seen in a draft RTS22.
So I don't think they're goingto suddenly axe it back, but the
draft says lots more change tocome.
Speaker 1 (07:06):
Jose, I want to come to you on this one From your
side, working obviously in a bigsecurities exchange and
obviously with oversight andconnections into trade
repositories as well.
What does it look like fromyour side?
We've heard from Matt about thechallenge for market
participants.
What about from theinfrastructure side side?
We've heard from Matt about thechallenge for market
participants.
What about from theinfrastructure side?
Speaker 4 (07:27):
I tend to concur absolutely with what Matt just
said.
There's nothing really newaimed at improving really the
vision or the view that theregulators would get from the
markets.
I would not only touch upon theRTS-22, on the transaction
reporting, which for sure Ishare absolutely what has been
(07:50):
said.
I don't really know if this isgoing to be really useful or
more useful for the regulators,you know, to gain access to
what's going on.
But I would also like to touchupon the RTS-1 and 2, which is
not that much related to thetransparency sorry, to the
(08:10):
integrity of the market, whichis much more on the side of the
transaction report ininfrastructures as Registria or
BME regulatory services are, butmainly on the transparency side
.
If we dive a bit into the newregime, bring broad forward on
(08:31):
the RTS1 and RTS2 for equitiesand bonds, it's kind of a
nightmare, so to speak,especially when you go into the
details of the federalpublications for transparency.
It is well intended, I wouldsay, and it intends to
standardize it a bit and to makeit more normalized throughout
(08:57):
the European Union.
But in the end it is creatingkind of a monster which is not
that easy to comply with or noteasy to implement.
So from the industryparticipant side.
I would say it will certainlybe a challenge and it will be
for sure as well for theinfrastructures.
Speaker 2 (09:17):
It sounds to me very similar to the discussions we
were having around EMEA refit.
Where there's a debate, it'sthe increasing of fields Is that
actually going to lead toimproved data quality?
And we know that the challengethat the market had as a whole
to manage those changes andactually something that Jose Mar
(09:39):
mentioned was about, you know,the end goal is to harmonize,
but I've also then heard thatpotentially there's going to be
a move from XML to JSON, sowe're then actually changing the
format of you know, of how youinstruct Now then does that mean
we're then going to see thatretrofitted to other reporting
regimes?
(09:59):
And if that's the case, youknow, we're just in this
continual cycle of of refits andadaptations to the existing
regulations, and that is a realchallenge for everyone in the
industry because that puts sucha cost burden, you know, on the
industry.
Um, and that for me, I findthat really interesting.
I I'm just looking at what willbe the final spec in that
(10:20):
direction of travel yeah, Ithought that was interesting.
Speaker 3 (10:22):
I mean, I have a slightly different perspective,
I suppose on EMIR refit, thatyou could argue that the
introduction of additionalfields actually tightens the
regulation, so there's kind ofless ambiguity there, which
somehow does improve dataquality.
Now again, like you, nick, I'malso not an expert on um myth
(10:45):
here, but I'd be interested toknow if, if actually the
additional fields would doexactly that remove, remove some
of the ambiguity in thereporting standard in terms of
eliminating ambiguity, barelycertain that there is not a
single new thing in thatdocument that eliminates
ambiguity.
Speaker 5 (11:05):
It adds it is entirely additive.
The only thing it removes andthere'll be a a silent cheer
when the podcast goes out is theshort-standing flag is removed.
So that is a huge burden, costof fortune to implement and
they've taken it away.
So that that's excellent, thatthat's good news.
I'm just trying to think of thevarious bits of the question,
(11:28):
andrew, so if I miss a bit, thenpick me back up.
So then the other bit, I think,was the go live and the date.
So we are currently, or we wereexpecting final text on my
birthday, march the 31st.
However, rumour has it thatwe're no longer expecting final
(11:49):
text on March 31st.
That's now pushed into June,july, august, where I think most
of Europe and certainly most ofthe UK will be off.
We're also hearing that theimplementation date won't slip
out.
So we've got waiting longer forthe actual text, but the
(12:11):
implementation date will stillbe end 26, early 27.
And one final point a lot ofwhat they've put in the text
requires guidelines.
Lot of what they've put in thetext requires guidelines, and
the guidelines, if history isour guide always come out after
the text they put to betranslated into.
(12:33):
There would be written and thentranslated into 27 languages or
thereabouts, and then they'llget produced.
So I've got a feeling thatthere'll be a panic.
Not panic, that's not the rightword.
Firmers will make a start, dowhat they can, but without the
guidelines to give the actualfinal detail about what goes in
what box and when, theimplementation will not go well
(12:57):
because they simply won't knowwhat to do.
Speaker 3 (12:59):
The implementation will not go well because they
simply won't know what to do.
I was looking at the process,you know, with my UK hat on, and
it struck me that there wasmaybe a different calendar for
the UK.
I think the discussion paperconcluded in February if I'm not
mistaken concluded in Februaryif I'm not mistaken and that
(13:23):
we're expecting a consultationpaper sometime later this year.
But then what you justdescribed with regard to the EU
process and obviously you've gotthe element of the translation
in member states, etc.
So I'm working on a basis thatwe probably got these dual
calendars, a bit like refit,where we had what was it?
Five months between the tworegimes, and am I wrong to
(13:47):
assume that would be the case?
Speaker 5 (13:49):
No, joe, you're absolutely right.
So the calendars sort, I mean,best guess is the calendars
align.
And you will be I think will bein a similar situation to refit
, as in ESMA will go first andUK will follow, or UK will go
first and ESMA will follow, butit feels very refit-like at this
(14:11):
point.
Fca have got DP, as you said,we've then got CP, we've then
got policy statement and we thenhave implementation period.
Speaker 3 (14:21):
So they're aligning, but they're not aligned yeah, so
there's there's pros and conswith that.
Right, you know it's alwaysgood to avoid the big bang.
Um.
We saw with uh refit in in theuk that we certainly benefited
from learning from some of themistakes.
(14:42):
Likewise, our clients were inmuch better shape because,
although there was some um smalldivergence between the two
regimes, you know, they wereeffectively in production for
five months before before theyhad to um go live in the UK.
Then some of our larger clientsmay not share that view because
(15:04):
they're then having to maintaineffectively two different sets
of regulatory standards inparallel across the channel.
Speaker 5 (15:13):
This is a bit speculative, but I'll say it
anyway.
So up until the politicalpolitical landscape I think has
changed quite a bit as wellsince all of this process
started mifia review, um,financial services and markets
act 2033, etc.
And the ceo of the fca was onlinkedin this morning as being
(15:35):
in europe yesterday and we neverheard any of that until
recently.
And there's been a couple oflinkedin posts on fca are
talking to esmer.
So I don't think that's goingto make a radical difference,
and I'm just put it.
It's just something that's.
The temperature has changed inthe last three months.
So that sort of divergencepiece, that timelines timelines
(15:57):
piece, that you know, are wegoing to go left at the road
traffic lights and Esmer goright?
It reads like that today, butthere's plenty of time for that
divergence bubble to emerge.
So quite how far we go rightand how far they go left really
is yet to be decided.
I mean presumably on that front.
Speaker 1 (16:20):
The thing to be avoided is no one wants a sort
of dual track reporting regimewhere you're actually having to
report the same data into twodifferent authorities and two
different structures andpotentially, as Nick's raised,
some of it in JSON, some of itin XML.
I mean that sounds like a technightmare to me.
Speaker 5 (16:39):
Yeah, as it currently stands, it looks like there's a
hard left and a hard right, butwe just don't know.
And someone's going to come outthe gate first, but there's
always going to be someonefollowing behind.
So we just at the moment don'treally know how much divergence
there will be and how much FCAwill say what they said they
(17:02):
were going to do reducecomplexity, improve
competitiveness and make thingsgenerally overall better.
Speaker 1 (17:10):
I realize this isn't really a TR issue, so it's
probably not fair for me tothrow this at Nick and John, but
I'm going to throw it in anyway.
Consolidated tape this soundsvery exciting.
I wish I had some of that in myshed.
It sounds like you know reallyhigh powered stuff.
No, consolidated tape this is.
There's quite a lot of jargonin here.
We've got, you know, systemicinternalizers.
We've got consolidated tape inequities that's going to move
(17:33):
over to non-equities and thatseems to be doing something
quite challenging for marketparticipants to validate their
own data and what have you, andcreate this sort of golden
source, which I know, nick, youoften talk about the golden
source as being something that'svery hard to achieve or attain
in the one in the cloud.
Okay, so is this the movetowards the golden source?
(17:54):
Is that what the consolidatedtape issue is, and is that going
to mean something for thederivatives industry?
Matt, yeah, consolidated tapeissue is, and is that going to?
Speaker 4 (18:02):
mean something for the derivatives industry, matt.
Oh, thank you, I think.
Andrew, when you refer to thegolden source, I would ask you
in return the golden source ofwhat for what?
Because what's what seems to beabsolutely inexputable now is
that the consolidated tape willnot be useful at all for trading
(18:25):
purposes.
So, in my view, what seems abit unbalanced is the huge
effort that you mentioned thewhole industry is going to
deploy to set up not only one,but three different consolidated
tapes one for equities, one forbonds and another for
derivatives.
(18:47):
Huge cost, massive cost to setup these consolidated tapes with
, I mean, I would say, limiteduse, limited case usage for the
users of the tape.
By the way, as you know, andcontrary to what happens in the
reg, nms in the States, there isno obligation for users to
(19:12):
consume this data, which I meanmight end up with very, very,
very low usage of theconsolidated tape data.
There is no obligation neitherto refer to this data in order
to find where, for example,where the best execution is in
(19:37):
real time.
And there is also a latencyissue which I know this has been
worked out very heavily by allcontenders of C-frame tapes.
But in any case, given the longdistance between the more
distant points in Europe.
The latency with which thewhole market data will be put
(20:01):
together and consolidated andthen disseminated to the wider
industry makes it non-usable atall for trading purposes.
And may I remind you all thatthe main, you know, use case
that was said at the beginning,or that was used as a main motto
for putting forward thisconsolidated tape, is offering
(20:28):
wider and fuller transparencyinto the European market in
order to ensure the bestexecution is findable, that
trading can be done at thelowest cost possible.
And we are seeing that this isnot going to be a real use case.
So that's on the one part.
(20:51):
And then, as the rest of theguys here mentioned before,
there is here again an issuewith the timelines.
We are watching.
I say we in the European Union,three different types are
expected, with three differentlaunches of them, with three
(21:11):
different launches at the sametime of selection processes, of
selection processes.
So I mean again, I'm not surethis is going to solve really
the data issue or the you knowtheoretically issue with the
data that has been making somuch noise in the last years.
Speaker 1 (21:32):
Is this push for greater alignment actually
making the job of reporting,both for the regulators and
trade repositories marketparticipants?
Is it actually making anyonejob of reporting, both for the
regulators and traderepositories market participants
?
Is it actually making anyone'slives easier or is it
unnecessary complexity, matt, ohwow.
Speaker 5 (21:51):
I think in the transaction reporting space, it
is very disappointing that thereappears to be no attempt to fix
existing issues for dataquality.
So we forgive the plug.
We test for data quality.
New firms to us still have75-80% error rates on onboarding
(22:15):
.
Regulators are still reachingout to clients, to their
submitting firms, to say yourdata quality is not good, please
fix it.
And it's seven years.
In 2018 is now seven years ago.
The back reporting volumes arevast, still as a percentage.
I don't know how you guys seeit on your arm, but my general
(22:39):
knowledge of arms is it'smassive.
As to what's correcting at theregulator, so I think, from
making things better, makingthings simpler, improving data
quality, the esmer text as itcurrently stands is
disappointing that nothing hasbeen addressed.
They've just added more stuffto get wrong, if you like.
(22:59):
On top of the existing burden,there is some element of
harmonization.
They're changing the fieldnames to reflect the same field
names as EMEA and SFTR.
So that is a tweak, it's ahousekeep, a, it's a dusting the
top shelf, um.
(23:21):
And there is some element ofcleaning up some of the
reporting in the derivativespace.
So they've aligning the use ofthe buy sell fields, the
direction.
So there is some gentle move tomake things look a little bit
like emir, but that's not really.
There's a lot more they couldhave done to sort out data
(23:42):
quality issues and that I thinkis the biggest divergence is
that FCA have gone to market tosay what can we do to sort out
data quality?
What problems have you got?
Here are some of the problemswe know about and we've got and
we'd like to solve for, whereasESMA haven't done that and it's
(24:04):
just a bit of a shame.
Now, whether the SCA take anyof that on board and do anything
about it, of course I couldn'tpredict or tell, but it was a
much, a tangibly differentapproach in the UK and on the
ESMA side.
Speaker 3 (24:21):
Yeah, I think it was interesting as well.
I know it wasn't strictlyspeaking data quality issue, but
you know when we're talking,we're talking about the maturity
of the regulatory regime and,uh, you know, market
participants compliance withthat.
It's probably interesting tonote that in january this year,
um a firm was fined by the fca Ithink it was the first fine
(24:45):
post-brexit for mifiatransgressions and I think a
firm was fined a hundredthousand pounds for
non-reporting of cfds.
And then also, which is always,what do they call it?
Sorry, what's the word I'mlooking for?
Exaggerating factor.
It's not.
Speaker 1 (25:06):
Exacerbating or mitigating.
Speaker 3 (25:11):
No, it's the opposite .
But anyway, not telling theregulator Exactly, yeah, okay,
so a firm would find 100,thousand and an element of that.
I think that there's like amultiplier in the sanctions
regime, um for not proactively,um notifying um the regulator of
(25:33):
the of the emission.
So uh, yeah, I just thoughtthat was.
That was interesting to know.
Speaker 2 (25:39):
So it's not, it's not even data quality, it's a in
some cases it's it'snon-reporting altogether we keep
using this word harmonization,but I've said it before, when
everyone's got a differentflavor of harmonization, it's
not harmonization.
So you know, there we've seentoo much deviation across the
regulations.
You know, and you've seenyou're seeing different
approaches.
You're seeing too muchdeviation across the regulations
(25:59):
.
You know, and you're seeingdifferent approaches.
You're seeing an EU approachfor more data.
You're seeing, you know, in theUS potentially going the other
way as well.
And it's what data do youreally need to understand and be
able to assess systemic risk?
So what do you actually need?
I actually think it's gettingmore complex and it's getting
harder.
And this is why, you know, weoften sit and talk about and
(26:21):
you've mentioned it already,andrew this kind of golden
source.
You, you know, as we move tolike common data fields, do you
really need to report it?
Couldn't the regulator justpull that data?
If it's common data?
Could you have this goldensource where people or the
regulators, the ncas, could justpull what they needed, the
reports out and when?
But I just think it's beengetting so complex.
You just can't see a path tothat at the moment because the
(26:45):
burden of the build and theexecution I just can't see
anyone having the time or theinclination or taking the risk
of owning it.
So at the moment I think theheart's in the right place and I
think the intention is correctand it is about ensuring that
the data is there and it'scorrect.
But I actually think that theburden's increasing and the
(27:06):
complexity isn't necessarilyhelping Because, to Matt's point
, we're seeing a lot of clientsnow that are having to
back-report.
We're seeing that a lot ofpeople have been struggling with
their data and with theirreporting, certainly in reef you
know from mere sightings, refitgo live.
So there have been a lot ofdownstream problems that are
(27:26):
only now starting to beaddressed okay.
Speaker 1 (27:29):
Now, sadly, we have to start drawing this season
finale to a close here, and youknow we love to end on a big
finish, and I have a big finishquestion, something we can
discuss no doubt long intoseason 11.
Manuel, yes, we're doing season11.
And that is, of course, regtechplays a critical role here,
(27:53):
doesn't it, matt?
You've actually written quiteextensively about this idea that
the new MIFIA reportingrequirements necessitate
advanced technological solutionsto address all these points to
do with cost per transaction, todo with volumes, to do with the
ability to keep pace with theregulation and all those
requirements.
So why don't you kick us off?
(28:14):
Is this the time where you know, we know, that the regulatory
burden will only get heavier?
The tech is catching up andfirms are catching up with their
own internal tech.
Is this going to be a sort ofgolden age of regtech?
Speaker 5 (28:30):
I don't see a lot of structural change in the firms
and new radical solutionstechnically to get around the
added burden of the regulatoryreporting, because a lot of it
is guidelines and interpretation, which, unfortunately, is not
(28:53):
easy solved, although AI must beable to solve it because it
solves everything.
But no, it doesn't solveinterpretation and guidelines,
guidance, and that's where a lotof this new burden is going to
come from.
That said, you know we're afintech firm.
We automate testing and we dosomething that it is much
(29:16):
cheaper for one specialist firmto do than lots of other firms
all trying to individually buildout, and I'm sure we'll see
stuff from infrastructureproviders like the arms, and
we'll see stuff from some of theintermediary firms who will do
what they can to try and solvesome of these problems and help
(29:38):
firms make the reporting andreduce some of that internal
individual build acrossindividual Ethereum investment
firms.
But there's one thing and thismay be a bit controversial the
regulators themselves couldsolve a lot of these problems a
lot of problems with backreporting and data quality
(29:58):
correction by offering aone-stop service that corrected
the data in the database.
Great, there's a lot of peoplein the middle making money out
of back reporting and theregulator could just simply
update the database once cleanly.
(30:19):
But that isn't happening.
That doesn't, isn't allowed andthat's a bit controversial.
But god, you could stop a hellof a lot of back reporting and
cost on the industry if that wasthe case on on that point I'm
going to dive in with j Ma.
Speaker 1 (30:34):
I got to ask you is this are you going to be
replacing Nick and John with AIanytime soon?
Basically, will there be robotssitting here?
Because what Matt said, as hesaid, I did think to myself.
If we're talking about naturallanguage and processing and
interpretation, clearly AIdoesn't think, and we know.
It's really just very, verygenerative.
Ai is just very advancedpredictive text with big uh
(30:56):
language models behind it andneural nets that predict the
likely meaning of things, andthey do definitely get things
wrong.
But could that be a technologythat starts to find its way into
the operations of big marketinfrastructures like bme6?
Speaker 4 (31:14):
yeah, why not?
I mean, you can train largelanguage models with lots of
stuff, lots of different typesof regulatory issues, but, as
Matt just mentioned, there is abig, big space for
interpretation of the rules andthere I'm not sure if the AIs
can play a differential rolethere.
(31:38):
In any case, let me stick tovery basic statements which I
can't get rid of when discussingthese sort of things.
In the end, I don't reallythink it is about AI regtech or
whatever you want to call it.
I mean, it technology is not agoal in itself, but I mean I
(32:01):
think it would be as useful asit helps really clients and
industry players to comply withthe requirements.
In the end, let's not forgetthat.
Uh, you know, the ultimate goalof obliged entities is to
demonstrate that they comply,but sometimes they do not get
(32:25):
any real value out of thatcompliance with the regulations,
except the compliance in itselfand the avoidance of fines and
these sort of things.
So I would say it doesn'treally matter if it is AI or
whatever.
The clients would opt for thesolutions that better you know
(32:47):
suit their needs.
Speaker 1 (32:50):
Great, thank you.
Well, sadly, that is it.
We have to draw season 10 to aclose without me even name
dropping my uh book published ayear ago creativity how to
rework, rethink and reimaginewith generative ai.
Do check it out, it's in allgood bookstores.
Um, I won't mention that andwhat we will do, in fact, is
(33:11):
give a huge virtual studio.
Thank you to our guests.
Oh, and, incidentally, beforewe do that I do want to mention,
because it's very importantthat you know, uh, on the 2nd of
april, uh, we suggest that youare, um, okay, but before we go,
I do want to mention that onthe 2nd of april, uh, there is
the f-i-s-d uh madrid, which isat the beautiful Palacio de la
(33:35):
Bolsa, bme's headquarters there,and it is going to be a really
important meeting talking aboutlatest trends, shaping the
financial data landscape.
Ai is going to be on that topic.
If you like what you heard inthe show there, you've got to
hear a bit more of this, jose.
Tell us a bit more about it.
Speaker 4 (33:56):
Yeah, sure, you know, FISD is the global forum for
industry participants to discussaround market data issues.
There will be some nicediscussions around reasonable
commercial basis, which issomething we have not touched
upon today, but it's amazing andit's triggering the lowest
(34:16):
passions through the wholeindustry in Europe, with lots of
articles, lots of posts onLinkedIn, articles in the press
and so on and so forth.
There will be some discussionsaround technology, for sure.
Ai and our CEO, Juan Flames,will deliver the opening speech.
So I invite you all to go thereand to join us to have a nice
(34:38):
evening.
Speaker 1 (34:39):
Okay, so make that date in your diary for April 2nd
John.
Speaker 3 (34:45):
Seeing as we're doing plugs, I'd also like to give a
quick plug.
So, registar UK, we're holdinga client breakfast event for our
clients on the 6th of may,where we'll be taking a look
back at the last eight months orso since the implementation of
refit and we'll be talking aboutsome, uh, exciting new
(35:08):
functionalities that that willbe rolling out.
Um, and I think actually you'realso planning similar for
Luxembourg and Frankfurt clientsNot Luxembourg and Frankfurt
clients, but those locations, Ibelieve.
Speaker 1 (35:22):
All right, good, that's good.
Yes, make sure you join Johnfor that.
That'll be turning up.
No doubt We'll get an update onthat, possibly some live
interviews coming to you, liveon direct from the client event.
Fingers crossed, I'm looking atManuel, please.
I desperately need to get outof this studio On that front,
just because I need some sun.
It's been nice weather On thatfront.
(35:46):
All that remains is to give ahuge virtual studio.
Thank you to our very specialguests, starting in no
particular order.
Big thank you to Jose ManuelSantamaria, who is the head of
the ARM reporting business atbme6.
Jose, thanks for joining us,thank you, my pleasure.
And a huge thank you to matthewvincent, director of mafia
reporting at kaizen.
Matthew, thanks very much.
(36:06):
Say hi to tim for us too, wewill do.
Thank you, great, okay, that'sgood.
And of course we have have tothank my long-suffering and very
youthful colleagues, of coursethe voice of Reason himself and
my most regular co-host, mrNicholas Bruce.
Nick, thanks a lot.
Speaker 2 (36:25):
Thank you, Andrew, and a huge thank you to Matt
Jose Mar.
I really enjoyed the show andthank you for joining us.
Speaker 1 (36:33):
I really enjoyed the show and thank you for joining
us and also a huge thanks to theever youthful and, you know, a
very well-travelled, as he movesbetween Europe and the UK
effortlessly, like pre-Brexitexport, mr John Kern.
John, thanks very much.
Speaker 3 (36:50):
Thank you and, like Nick said, thank you also to the
other panelists.
It's, uh, it's been a realeducation for me and, uh, I've
enjoyed it thoroughly.
Speaker 1 (37:00):
Thank you join us on our linkedin channel, that's
linkedincom slash company, slashregis hyphen tr, where you can
network with matt and with josemar and with nick and with john
and even with me and everyoneelse who's been on the show, uh,
over season 10, and we will beback for season.
Who's been on the show overseason 10.
And we will be back for season11.
I guess, in the meanwhile,that's just a big goodbye from
me, andrew Keith Walker, andfrom the studio producer, manuel
(37:24):
Moreno-Garcia.
I know Manuel doesn't normallycome on the mic, but Manuel,
thanks very much.
Thank you so much.
Okay, we're off for our springbreak.
Have a good few weeks, have asafe few weeks and we'll see you
in a few weeks.
Speaker 2 (37:42):
Bye-bye.
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