Preparing for regulatory developments in Securities Services

Margaret_Harwood-JonesOur industry is among the world’s most tightly regulated, due to the importance of financial services to individual wealth and collective economic growth. The scope of regulation continues to expand, with almost 400 implementations in progress during 20201. Post-2008 reforms aimed at systemic stability and consumer protection are almost complete and subject to review. But it doesn’t stop there. The regulatory agenda continues to expand as the digital technology revolution presents opportunities such as open banking and risks such as new cyber-security threats. Coupled with the growing need to disclose, measure and report the non-financial impacts of investments on our societies and environment, and the continual evolution of AML/KYC requirements, regulatory preparedness will remain critical to long-term success. We hope this Regulatory Readiness series will help securities services clients stay abreast of, adapt to and accommodate these regulatory developments. As the scope of regulation widens, complex change management projects are becoming the norm. To operate effectively and safely within an evolving regulatory framework, firms need to understand the spirit as well as the letter of the law, and its impacts all along the transaction chain:
  • What is the underlying objective for the new regulatory requirement?
  • What change in behaviour or process is required?
  • What need or threat does it address?
  • Do you need to discuss changes with your clients or suppliers, or potentially even develop new relationships?
Our Regulatory Readiness series provides the context behind the new rules to help clients understand the potential breadth of their impact and to prepare for it. As well as being highly regulated, financial services is also one of the oldest industries in the world. It delivers value to clients based on timeless principles which cannot be outmoded by changes in taste or technology. Trust, custody and safekeeping, for example, are as fundamental to the provision of securities services today as they have ever been. Custody has always meant more than the literal safekeeping of client assets. To us, it also means protecting clients’ investments in the much protecting clients’ investments in the much broader sense by keeping them apprised of emerging and evolving risks, responsibilities and opportunities. To this end, our first three primers in this series highlight the potential for open banking to support new services, as well as the due diligence implications of new asset safety rules and operational changes needed to comply with CSDR. By regularly sharing our insights on the wider implications of regulatory developments with you, our clients, we aim to better safekeep your assets and safeguard your interests in a your assets and safeguard your interests in a holistic manner as our industry continues to grow in complexity. Across the diverse regulatory themes covered in these individual primers, safety and efficiency are among the most resounding, for both you, our clients, and your own downstream clients. As custodians, we at Standard Chartered look forward to sharing our expertise and experience, supporting you to innovate and thrive within the context of an ever-changing regulatory environment. By Margaret Harwood-Jones, Co-head, Financing & Securities Services, Financial Markets, Standard Chartered © 2020 funds global asia

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