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Risk & Regulations: MiFID II, MiFID II, MiFID II

In 2017, GreySpark has enjoyed a fruitful project pipeline in terms of helping its clients with many aspects of MiFID II. RTS 6 brought HFT and electronic trading very much into the spotlight, and our service offering approach has enabled us to assist many of our clients to document their governance and algorithms, which is a necessary requirement for all banks and brokers with an electronic business. We have also run significant projects working with clients to deliver their overall MiFID II programme, providing experienced subject matter experts in regulatory change, as well as seasoned project managers and programme managers. Implementing solutions for transaction reporting to provide transparency, and surveillance to capture market abuse, were also among the project themes that we were involved in throughout 2017.

GreySpark London was also able to work with clients who were looking to leverage MiFID II, and not just be compliant. The regulation required all operators of trading venues and their members / participants to record and track the events to a level of granularity that can be proven and is also consistent. Having such a low level of time stamping and clock synchronisation throughout the e-trading estate gave clients the opportunity to not only understand the performance latency of their platform(s) but also to identify opportunities to analyse and improve.

For example, GreySpark consultants leveraged their knowledge and experience of infrastructure performance, the tools and best practises, as well as their knowledge of vendors and solutions to help a client design a target state architecture that delivered MiFID II compliance for clock synchronisation but also captured the performance / latency from tick-to-quote-to-trade on the client’s structured products platform.

As we look forward to 2018, the London business still expects to spend a significant amount of time supporting clients on regulatory compliance-based projects. MiFID II will have been implemented, but we still expect the need for a significant amount of post-implementation remediation work for many of the banks and buyside institutions.

Meanwhile, the GDPR and the FRTB are two examples of regulations that may have taken a back seat throughout 2017 among those banks and buysides, and compliance programmes for those mandates will now need to be at the forefront of many of our client’s minds. The GDPR should not be underestimated and it is impacting all types of organisations both inside and outside of the finance and capital markets arena.

The FRTB, though, is a more targeted set of rules for banks to ensure that they are capitalised appropriately for each of their trading businesses. GreySpark is well positioned to support our clients in all these areas of change; our team of regulatory experts and our tested methodologies and approach help ensure we can give clients a consistent and proven outcome.

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