Regulators are becoming more adept at remote market surveillance on pace with the financial industry’s ongoing adaptation to working from home, according to the chief executive of Exchange Analytics, a US compliance training provider.
This represents a paradigm shift for market participants, who must adapt to more stringent expectations as regulators’ remote capabilities accelerate.
“In today’s business environment with the Covid-19 pandemic, they’re not skipping a beat,” Joe Adamczyk told Global Investor. “If firms cannot manage work-from-home environments, they will be cited by the regulators, who aren’t letting up much in terms of what their expectations are.”
Initially, before the full impact or duration of the pandemic were fully understood, a few exceptions were made, said Adamczyk, who was previously chief compliance officer at Chicago-headquartered clearing house the Options Clearing Corporation and global head of enforcement and investigations at CME Group.
“Now regulators emphasise that they’re becoming more adept at collecting data and conducting examinations remotely, allowing them to do things at greater scale, so firms need to do the same, and that’s a real opportunity for us.”
US regulator the the Commodity Futures Trading Commission said last month that working from home amid Covid-19 will become standard operating practices indefinitely for many firms.
Exchange Analytics provides compliance training, certification and support services to 75% of US clearing firms and two thirds of global systemically important banks (G-SIBs) designated by the Financial Stability Board. In addition, its platform is used by broker-dealers, registered investment advisors, introducing brokers, asset managers and trading firms in more than 40 countries.
Adamczyk was commenting as the firm marked its expansion into Europe, establishing a presence in Geneva through a partnership with Ekur Advisors as it moves to widen its product offering and look beyond its US focus.
“Asian customers are coming to us for solutions with respect to their US market needs,” Adamczyk said. “We want to capture their home businesses as well, and the partnership with Ekur helps us to do that.”
Key to Exchange Analytics’ expanded offering will be the provision of cross-border e-solutions to help clients in Europe, Asia and the US meet the demands of constantly evolving regulatory obligations, particularly for global businesses that need to address corporate compliance in several jurisdictions.
To achieve this, the firm is investing in the development of data analytic applications, automation, and electronic distribution, as well as broadening its offering to a full suite of compliance and training services including ESG, consumer privacy, anti-money laundering and FX code of conduct compliance. The expanded e-solution suite will combine with Ekur’s personalised advisory practice.
“Right now we see very one-off examples tailored to a particular market or a particular business process, but there’s a lack of solutions out there that offer a one-stop shop for customers,” Adamczyk said. “That’s what we’re looking to capitalise on.”
Regtech and data analytics firm SteelEye has described a run of demand for communication surveillance amid Covid-19 as firms adapted to working from home, describing the issue as a “real hot point”.
- Wendy Lisney, Global Investor Group/FOW
