Cappitech study shows errors and inefficiences plaguing reporting for majority of firms

Ronen Kertis, CEO, Cappitech.

Although regulatory compliance is an integral part of a financial institution’s daily life, the majority or 65% have been forced to change their reporting in the last 12 months because of errors and inefficiencies, according to Cappitech’s third annual global regulatory reporting survey.

The regtech firm polled 89 respondents including banks, brokerages, asset managers, hedge funds, corporates, and other institutions globally.

The report also noted other key issues impacting firms’ regulatory reporting requirements include new and changing regulations, the CME’s decision to exit the transaction and regulatory reporting market, and Covid-19.

“Cappitech CEO Ronen Kertis said, “Transaction reporting continues to cause challenges for individual firms, even if those challenges vary across the market. This year, unexpected changes in the form of CME and Deutsche Börse departures and, of course, the global health crisis, have added additional complexity, impacting costs and efficiency and driving additional changes in how these firms manage their reporting.”

In late September, Deutsche Börse announced it was selling its regulatory reporting hub’s suite to MarketAxess Trax while four months earlier CME Group said it would scale back its regulatory reporting businesses, including NEX Regulatory Reporting (NRR), NEX Abide, and its European and Australian trade repositories (TRs).

The survey also revealed that as many as 66% of respondents have not implemented any systematic method to monitor the best execution, up from 61% last year, despite this being a requirement.  However, the report stated that there have been many distractions in 2020, and firms are planning, to implement best execution in the next 12 months.

It has not all been gloom and doom. There has been progress on the reconciliation front with 67% of the companies now performing required tasks, up from 55% last year.

Moreover, the regulators are focusing on helping companies with their reporting, providing regular feedback for 54% of the companies in the period, compared to a mere 32% last year.

Brexit preparations are also high on the agenda.  Around 68% are aware of a no-deal Brexit, while 71% have already decided on migration measures. However, leaving the European Union was cited by  significant number as the key regulatory challenge for the next 12 months.

©BestExecution 2020

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