Banks' legal and compliance officers note confusion about the best approach to adopt for year-end product reviews required by investor-protection rules under Europe's revised Markets in Financial Instruments Directive. Some say they find the rules overwhelming, but others see application in a "proportionate manner" as a way of reducing the compliance burden.
The Chinese central bank faces a challenge to keep inflation under control while avoiding defaults among debt-laden industrial companies. Although consumer prices increased 2.5% year over year in September, fresh data suggest factory-gate price growth slowed to 3.6% year over year in September from 4.1% in August.
A major investment in artificial intelligence could help global custody network managers cut their compliance burden, which is considerable and is likely to grow further, given the vast data involved. Delegates at a meeting on the issue have been told many custodians rely on a due diligence questionnaire endorsed by AFME for compliance checks on client assets with local agent banks and markets, but this an increasingly cumbersome process, and many hope AI ultimately solves the problem.
China plans to accelerate international access to its derivatives markets, as well as increase cross-border regulatory co-operation, China Securities Regulatory Commission vice chair Zhao Zhengping told a derivatives forum. "We want to introduce more international investors and further internationalize the market through QFII and the RQFII [designations]," Zhengping said.
The reluctance of banks to start transferring agreements and contracts from London to Europe may mean the work will not be completed in time for a no-deal Brexit scenario and lead to a no-trade listing after March, experts say.
The increase in consolidation of large systematically important exchange groups is also increasing risk, but regulators in Europe and the US are slow to put controls in place, says University of Warwick associate professor Stephen Connelly. "Exchanges are concentrating and therefore also concentrating risk, but regulatory controls of these systemically important platforms are still playing catch-up," Connelly said.
Coinbase's Adam White has been appointed Chief Operating Officer for crypto startup Bakkt, a position he will start next month. White noted that Bakkt's plans to offer financial institutions the safety of regulated trading similar to trading equities is why he took the post.
Diederik Dorst, global head of regulation and market structure at Flow Traders, has been named vice chairman of the FIA European Principal Traders Association.
Tougher regulations and a "robust banking market" have made it harder for financial technology startups to gain revenue share in the US market than the UK market, according to a report from Accenture. While 19% of US financial institutions are new entrants, they account for 3.5% of revenues, compared to the 63% of new entrants taking 14% of revenues in the UK, notes the report.
President Donald Trump continued his criticism of the Federal Reserve on Tuesday, calling it his "biggest threat" and saying of Jerome Powell's appointment as Fed chairman, "maybe it's right maybe it's wrong, but I put him there." Under Powell, the Fed has raised interest rates faster than Trump wants.