Compliance special report 2011


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An article by Robert Proctor, Vice President of Compliance Products, Linedata

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Compliance special report 2011

  1. 1. WATCH FOR SPRING GET READY Totally new compliance tools are heading your way. 2011 RELEASE Developed through the partnership of Ascendant Compliance Management has partnered with Compliance11 to develop tools unlike any other: the industry’s most comprehensive, integrated and compliance software geared towards managing compliance and your business – effectively and seamlessly. Watch for details at © 2011 ASCENDANT COMPLIANCE MANAGEMENTCompliance 2011 cover.indd 1 3/15/11 11:21 AM
  2. 2. SPONSORED ARTICLE Dodd-Frank: You Had Better Break Out Your Checkbook By Robert Proctor, Vice President of Compliance Products, LinedataYou better break out your checkbook, a To further complicate the matter, since the clear. Until that time technology departmentsfamiliar phrase to anyone in the military. If approval of the Dodd-Frank Act the will tr y to adapt to the unknown whileyou lose or break gear, it’s up to you to Republican Party has seized control of the continuing down known paths like platformreplace it. One look at the 850 pages of House of Representatives and in February consolidation, regulator y compliance“clarity” that is the Dodd-Frank framework the House Finance Committee unanimously automation, system upgrades and new andand these are the first words that come to approved the Oversight Plan of the better technologies like ASP and hosted-mind. Who is going to foot the bill for this Committee on Financial Services for the One infrastructure solutions.behemoth new set of regulations? The Hundred Twelfth Congress. Among other In the long-term: The financial servicesanswer unfortunately is all of us: the tax things the plan will allow the Committee to industry will experience profound changes topayers, asset managers and ultimately, the closely review the rulemaking and spending market structure, market participants and ainvestors. of the regulatory agencies involved. With the complete technology retooling of the As the famous author Mark Twain once Republicans mainly opposed to the industr y. Banks, hedge funds, brokers,proclaimed “I didn’t have time to write a regulation this will no doubt be quite heated. clearing firms, industry utilities, custodiansshort letter, so I wrote a long one instead.” The likely victors in this impending battle are and software vendors will all race to addressLikewise, rather than pinpoint specific the lobbyists. pieces of these issues, such as in areas liketargets, the House Financial Ser vices margin calls and collateral management.Committee took the shotgun approach SO, WHAT DOES ALL THIS Imagine giving 300 road crews the goal ofhitting all facets of the financial industry with MEAN FOR THE INDUSTRY? building a new interconnecting and efficientan 850 page tome. And what a story it is; highway infrastructure for the United Statestruth is though, the bill that was signed last In the short-term: Dodd-Frank will be to by dropping them in different locations. TheJuly is really just the beginning. The Dodd- the legal, consulting and conference likelihood of these solutions converging toFrank Act may have put forth the general organizers this decade’s equivalent of the create an effective solution the first timeguidelines for change, but it lacked the Y2K technology consulting windfall of the around is slim. What is clear is that efforts tospecific rules and regulations which are still 90’s. Firms will line up to hand them wads of tackle this problem will create new marketto be determined by the various regulatory cash to dissect the impact of this regulation solutions, new problems for industr ybodies. There are more than 240 of these on their businesses and help them sleep at participants and a new pecking order amongrules and over 60 studies each requiring a night. The spending on technology and market data vendors, utilities and technologydrafting of the proposal, review of comment solutions to address these issues will pale in and service providers.letters and implementation of final comparison as firms will experience decision To make a long story short, be preparedresolution. Since its enactment we have paralysis until the regulatory fog begins to to write some checks.seen, as expected, a steady stream ofproposals from the various regulator ybodies. The recently proposed budget from Robert Proctor, Vice President of Compliance Products, Linedatathe Obama administration includes Bob is Global Vice President of Compliance Products for Linedata. In his current role, Bob’s focusapproximately $6.5 billion in additional is developing the Linedata Compliance pre and post trade enterprise wide compliance solution andfunding to financial regulators and will add supporting integration across Linedata’s product suite.about 5,000 new employees to help Prior to joining Linedata Bob was Vice President and Senior Project Manager at JPMorgan Treasuryimplement and enforce these new Services and Compliance department. Within this role, Bob was responsible for defining derivativesmandates. If the cost for regulators is $6.5 exposure rules and building the systems infrastructure to support compliance across their portfolios including, 1940 Actbillion then it is safe to assume it will cost the funds, variable annuities and 2a-7 money community several times that tocomply. The good news is that most of the Bob has over 15 years of industry experience working both for global asset management firms and compliance softwareincreased regulatory budget will be offset by vendors. Prior roles include business analysis, product design, quality assurance, and implementations. Bob started hisadditional user fees, transaction fees and career as a fund accountant / administrator His background is unique in that Bob has worked for both vendors and institutions, and on both the systems and business sides of global asset management firms.other charges back to the industr y.Unfortunately that means that the financial Bob holds a B.A. from Merrimack College, Massachusetts. In addition, he hascommunity, and ultimately the investors, will a Certificate in Computer Systems Specialists from Northeastern University,foot the bill for these changes on both sides. in Massachusetts. Reproduced with permission from Institutional Investor, Inc. Not for distribution. For more information on this Special Supplement, please call (212) 224-3214.