Chappuis Halder & Co. outlines a need for a proactive front-office approach to regulatory compliance amid rising costs and stricter regulations. The firm emphasizes the necessity for cross-departmental integration and strategic optimizations to improve revenue and manage risks effectively. They offer comprehensive consulting services aimed at enhancing risk management, business operations, and client-centric strategies in the financial sector.

1. CHAPPUIS HALDER & CO.
Front Office Regulatory Compliance and
Optimisation
July 2017
CH&Co. Front Office team

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Why today?
Main industry approach to date
 Done by patches, in reaction to rules
 Limited to NO holistic impact view or
proactive approach
 Conflicting with a search for FO
effectiveness:
– Limited RoE
– Limited staff
– Emergence of new types of
competition (automated platforms,
MTFs…)
1
2
3
7.7% worldwide RoE
45% to - 80% further reduction
expected for global markets RoE
global markets desks, over the next 3-4 years
69% CIB cost-to-income
no trend down, despite earlier projections at 55-57%
 Stricter regulatory requirements for MIFID2, OTC
Margining, SFTR, MADMAR, and Basel III continued
efforts (Capital, leverage, liquidity, collateral)
 Higher cost base due to compliance, risk management
and business controls
With regulations coming into force, impacts on profitability and internal funding levels require further change
at Front Office, and not only rules implementation

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A front-office driven approach, with pragmatic and tested
applications front-to-back
Scope
 2-3 years visibility
 Worldwide topics and local requirements
 2018-2019: MIFID 2, SFTR, OTC Margining, 871m, FRTB, Reg Reportings
Approach
 Business impacts angle
 Cross-impacts matrix, proactive balance
Change Management,
cross-dependencies review
FO only
FO and full Value Chain
 CRM step 0: onboarding  “No set-up, No business”
 Order Management
 Controls and projections
 Tackle patches for data and process fluidity front-to-back (governance, TOM…)
 Ensure full access over regulatory / industry changes
Why CH&Co.
 Rare FO Culture, language, spirit
 Credentials built up over last 3-4 years + past experience
 Global reach and consolidated view
 Strong feedback from clients

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CH&Co Front Office offer - Menu
Revenue Growth
New market/new business
Business portfolio review,
funding optimisation
Exit strategies
(incl. divesting, strategic
hedging/funding unwinding)
Client centricity
Cost reduction
Hedging optimisation
(incl. Execution Fee optimisation)
Cost per trade
Research costs
optimisation
Digital solutions
Scare resources
optimisation
XVA pricing integration
Risk adjusted performance
management RAPM (ROA)
Margining for bilateral
OTC derivatives
ALM FO Desk
Organisation
Risk management
compliance
Manual/automated trading
pre-trade controls
1) Suitability – EMIR/MIFID2/DFA/
FATCA/CRS
2) Op. risk reduction
3) FO workflow optimisation
IPV
(post-trade, pre-trade)
Code of conduct & best
practice policies
Other topics
 Additional topics, in conjunction with FO key topics
– Contingency Liquidity planning, FTP reorganisation
– Treasury investment strategy in sub-zero market, funding optimisation, trapped liquidity management,
performance/product centre approach
Key approach
 Quantitative impact studies (QIS), benchmarks
 Review, gaps, recommendations, implementation across governance, processes/controls, systems/data, people skills

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CH&Co. is an international strategy and management
consulting firm, specialised in Financial Services with a
strong spike on Front Office Development
200 consultants dedicated to the Financial Industry, 8 offices covering the
major financial places, 25% average growth for the past 7 years We are organized to provide 3 main kind of
services
 Risk & Finance
 Business Operations & Transformation
 Business Development & Innovation
We have developed recognized thought
leadership and expertise on some key topics
 Process digitalisation
 Client centricity
 Hedging optimisation
 Cost reduction/optimisation
 Scare resources optimisation
 Risk management
For the past 10 years, we have supported
major banks defining and implementing their
strategy in almost all business lines and many
geographiesOur international network allows us to pull from worldwide best practices in
order to provide tailored-made solutions to our clients