Collin Coleman, head of NEX Regulatory Reporting, discusses the end-to-end regulatory reporting solution that addresses the needs of reporting parties across the regulatory regime and, in this year’s Operational Risk Awards, has been named best regulatory reporting platform or service
How difficult is it to create a cross-asset and cross-jurisdiction reporting solution?
Collin Coleman: Creating a reporting solution that is cross-asset and that covers multiple jurisdictions is a very complex undertaking. The real challenges lie in the complexity of overlapping rules and mapping out how different reporting regimes relate to each other, as well as managing the life cycle of reports across regimes. It isn’t enough just to determine what needs to be reported; rules need to be implemented in a dynamic system that can adapt as the rules themselves evolve. Handling difficult cases such as a record update that passes validation for one regime but fails another is especially challenging, but it is critical to delivering a reporting service that firms can rely on.
What is the key differentiator between your solution and others in the market today?
Collin Coleman: In a word, service. We are unique in combining a high-touch and expert-led service that extends all the way from a consultancy-led approach to client onboarding to the regulatory reporting venue at the end of the reporting process. We look at the success of our clients’ reporting as a partnership where we are both responsible for a successful outcome. We only succeed if our clients do.
What are the main reporting challenges facing the industry in the run-up to the Markets in Financial Instruments Directive II (Mifid II)?
Collin Coleman: One of the biggest challenges is the European Market Infrastructure Regulation revision to the Regulatory Technical Standards, which comes into effect in November. This is a significant change and will impact the same teams that are working on Mifid II at a time when clients are making final Mifid II preparations. With regard to Mifid II itself, we will see many firms transaction reporting for the first time. Many of these firms will need assistance to prepare for reporting, and they will have to fight for the same small pool of expertise to implement processes and technology from the ground up if they don’t have a reporting partner that can provide a turnkey solution. Also, Mifid II transaction reporting represents a significant challenge from a technology implementation point of view. Not only are significant changes needed to the way in which data is collected, but changes will also need to be made to reporting processes themselves, which are ultimately implemented in IT systems.
How can your solution help smaller firms that might not have the necessary resources to meet such a mandate on their own?
Collin Coleman: We work closely with clients throughout the process to understand their specific needs and tailor an implementation plan to meet these needs. We provide expertise in correctly interpreting and implementing the rules, and sourcing and analysing data sources for reporting. We can remove much of the need for firms to do a technology build-out to get their reporting up and running through our ability to work with data from any source and in any format, which we can further transform and enrich as needed to make it suitable for transaction reporting. We also provide clients with a full set of documentation for their reporting solution, which can help them to demonstrate compliance with their reporting obligations.
Is it possible to use blockchain or other new technology to help streamline the reporting service in the future?
Collin Coleman: The application of blockchain technology in transaction reporting has a great deal of potential and could improve the accuracy and timeliness of reporting, and make oversight easier for regulators as you’d always have [a record of] the original trade. It’s likely that this would follow on naturally from the adoption of blockchain technology in the trade life cycle. Machine-readable regulatory rulebooks also have tremendous potential to simplify and streamline the reporting process in future, and should help to deal with the complexities of reporting across regimes and jurisdictions, especially where they overlap.