RIMES, SimCorp and Lombard Risk also have FinTech news to share.
NY DFS Proposes Regulation to Require Cyber-Security Programs
The state of New York via the State Department of Financial Services (DFS) wants to require banks, insurance companies, and financial services institutions to “establish and maintain” a cyber-security program via a new regulation proposed by the DFS and Governor Andrew M. Cuomo.
The impetus for the proposed new regulation came after DFS surveyed “nearly 200 regulated banking institutions and insurance companies to obtain insight into the industry’s efforts to prevent cybercrime,” officials say. DFS officials met with cybersecurity experts to uncover emerging trends and risks, due diligence processes, and policies and procedures governing relationships with third-party vendors. The findings from these surveys helped the rulemaking process.
Hailed as “a new first-in-the-nation” proposal, it will have a 45-day notice and public comment period before it is finally adopted, officials say.
If the requirement takes effect, regulated financial institutions will have to establish a cyber-security program, officials say.
They will also have to:
- Adopt a written cybersecurity policy;
- Designate a chief information security officer for implementing, overseeing and enforcing its new program and policy;
- And design policies and procedures to “ensure the security of information systems and nonpublic information accessible to, or held by, third-parties, along with a variety of other requirements to protect the confidentiality, integrity and availability of information systems,” officials add.
The final rule will not “limit industry innovation and instead encourages firms to keep pace with technological advances,” according to the DFS.
The proposed regulation by the Department of Financial Services includes certain regulatory minimum standards while maintaining flexibility so that
“Regulated entities will be held accountable and must annually certify compliance with this regulation by assessing their specific risk profiles and designing programs that vigorously address those risks,” says DFS Superintendent Maria T. Vullo in a prepared statement.
RIMES Readies Market Abuse Regulation (MAR) Solution for the Buy Side
RIMES, managed data services vendor for the buy-side, has launched RegFocus, a buy-side monitoring and detection solution for the Market Abuse Regulation (MAR).
The MAR package of legislation is intended to detect and prevent financial market abuse, and is also known as “MAD II,” after its predecessor the Market Abuse Directive (MAD). MAR had a July 3 start date but the European Securities and Markets Authority (ESMA) only recently released its Q&A guidance and is expected to publish a final report during the current quarter.
“Firms can no longer rely on the control provided by their brokers and must instead operate compliance policies to identify and control market abuse,” according to RIMES officials.
The RIMES offering is designed to meet regulatory obligations under MAR and many other surveillance regulations to help buy-side firms reduce the risk of insider dealing and market manipulation, officials say.
MAR, which came into force in July this year, greatly increases the compliance burden and associated costs for asset management firms.
RegFocus uses algorithms and analytics to deliver buy-side compliance teams a comprehensive review of all trading activity, RIMES officials say. The system monitors and detects behavior across multiple exchanges and asset classes, including electronic funds transfers, benchmarks, indices and portfolio rebalancing activities.
In addition, RIMES has appointed Jeremy Garland as head of compliance to lead the RegFocus team. Garland has nearly 20 years’ compliance experience, most recently as global head of monitoring and surveillance at Macquarie Group, officials say. He has also held senior compliance positions at Nomura and Merrill Lynch. Garland reports to Bruno Piers de Raveschoot, chief operating officer (COO) of the compliance division of RIMES.
“Fund management firms are facing very specific issues with the new MAR EU 596/2014,” says Piers de Raveschoot in a prepared statement. “The complexity of the data and the entity level for monitoring is very different than for the sell-side, and the reasons for market abuse are not the same. The way portfolio managers are measured impacts the risk of manipulation. A typical sell-side solution will not apply for that industry, which is why we developed a solution specifically for the buy side.”
SimCorp Dimension Gets FX Netting Capabilities via FX Connect
SimCorp, a provider of investment management solutions and services, has changed its partnership with FX Connect so that it can offer SimCorp Dimension users with “full foreign exchange netting capabilities,” officials say.
The SimCorp system can use FX Connect’s cross-currency netting capabilities to enable clients “to seamlessly block, net and subsequently compress large, multi-currency, multi-value date blotters,” officials say. “FX Connect also provides a full suite of flexible execution options tailored to the asset management community.”
The arrangement allows for integration to the Order Manager module of SimCorp’s Dimension for automated FX execution processing, officials add.
“Our shared clients are looking for ways to increase efficiencies and reduce costs associated with FX execution,” Lora Britko, managing director and head of FX Connect.
Lombard Risk Uses the Cloud for AgileCOLLATERAL
Lombard Risk Management, an integrated collateral and regulatory reporting solutions vendor, has debuted AgileCOLLATERAL, a cloud-based collateral management system. This offering has the functions of the current COLLINEsolution but “in a modular, light touch delivery format,” officials.
The vendor is targeting AgileCOLLATERAL at asset managers, buy-side brokers, pension funds, corporates and investment firms that need a “collateral-in-a-box solution.”
By using the cloud, the new offering eliminates the need for onsite installation and infrastructure costs, officials say. AgileCOLLATERAL can be delivered through either a license or subscription fee model.
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