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Q-and-A: SIFMA’s Tom Price on the outlook for Operations and Technology

4 min read


Tom Price is the managing director of operations, technology and BCP for the Securities Industry and Financial Markets Association.

What is your outlook for the technology and operations sectors in 2013?

The implementation of the Dodd-Frank Act continues to be a massive undertaking. As of Dec. 3, only 133 of 398 required rulemakings have been completed.

As more rules are finalized, the role of technology and operations professionals will expand. These professionals will be on the front lines, as firms seek strategic solutions to execute these new rules. And it’s not just Dodd-Frank that will require their expertise — as our economy continues to come back from recession, firms will look to technology and operations professionals for value-added ways to improve efficiency, infrastructure and risk management. This is how SIFMA’s Technology Group sees its mandate — to set priorities that help firms and regulators improve these key tenets of operating efficiency, infrastructure and risk management.

What are some of the priority regulatory reform initiatives for the technology and operations sectors in 2013?

We fully support the Financial Stability Board’s goal to establish a global LEI that is operational in 2013. A global LEI standard will dramatically improve systemic risk management and lead to substantial operational efficiencies for firms and regulators.

The consolidated audit trail, or CAT, initiative is also on the radar for 2013. We expect to closely collaborate with the SEC, regulators and our members to ensure the necessary infrastructure and systems are implemented in manner that is both efficient and cost-effective, leveraging existing systems and replacing outdated systems that are no longer required.

Another important priority is the continued review of the settlement cycle. SIFMA is providing guidance to the Depository Trust and Clearing Corporation as they review the potential costs and benefits of shortening the settlement cycle, which could potentially reduce risk in the markets and capital requirements at the utility.

What are some of the technology and operations highlights of 2012?

2012 was a busy year. We’ve seen the first LEI mandate go into effect through the Commodity Futures Trading Commission’s swaps reporting rules. The industry’s LEI prototype utility is now fully functional and being used in the U.S. for swaps reporting. LEI reporting will be an important new tool for systemic risk management — but of course, in order for the LEI initiative to be fully effective, there needs to be a global mandate. As I mentioned, SIFMA fully supports the FSB’s efforts to develop a global LEI.

SIFMA was also focused on the SEC’s large trader reporting requirements in 2012. SIFMA supports the SEC’s efforts to improve risk management, but there’s no denying the myriad of technical challenges that come along with these requirements. That’s why we strongly advocated for an extension of the compliance deadline, which was issued in April 2012.

Further, I’d be remiss if I didn’t highlight the industry’s response to Hurricane Sandy. SIFMA’s disaster recovery committee did an excellent job of uniting the industry in adverse conditions and showed us that no matter how much we digitize, people will always be key to this industry.

What business trends do you see impacting operations and technology?

The advent of “big data” and new ways to analyze it will enable technology and operations professionals to create new business models and revenue opportunities for their firms. I expect we will see big strides in big data over the next year.

Finally, cybersecurity is another critical issue. As an industry, we have a weighty responsibility to maintain safe and secure markets. SIFMA is committed to the development of cybersecurity policies that protect critical infrastructure, improve information sharing between public and private entities and safeguard customer information.

This question-and-answer session was produced as part of SmartBrief’s 2012 Best Of reports, which capture the year’s most important stories in each industry. Sign up now for SIFMA SmartBrief: Operations and Technology Edition to get tomorrow’s report on the top must-read stories for operations and technology professionals in the financial industry.

Image courtesy of the Securities Industry and Financial Markets Association.