Automating governance, risk & compliance workflows
Banks have been very successful in their responses to regulatory mandates establishing adequate levels of controls. However, approaches to risk and controls management remain inconsistent. Maturing this area will be of great benefit to the reputation and standing of banks.
GreySpark leverages expertise across electronic trading, regulatory change and trade surveillance to deliver strategic solutions tailored to meet your business requirements. We implement a vertically-integrated approach to risk management processes and controls and embed it into the fabric of the organisation, thereby delivering new cultural awareness across the entire bank.
We recognise that each problem is unique and that it is not possible or healthy to apply a one-size-fits-all technological solution. The GreySpark mission is to best utilise our expertise and cross-disciplinary teams to thoroughly understand our client needs, provide industry-leading, actionable advice and deliver innovative, bespoke solutions.
Interested in GreySpark's Risk Management Services?
We implement a vertically-integrated approach to risk management processes and controls and embed it into the fabric of the organisation, thereby delivering new cultural awareness across the entire bank.
Risk Management Service Offering
Electronic Trading Compliance and Risk Management
GreySpark’s Electronic Trading Risk Management services are specifically calibrated to help large financial institutions tackle the increasingly regulated world of capital markets. The service portfolio provides a proven governance foundation that scales across the electronic trading business for continuous supervision.
- GreySpark’s Health Check advisory and implementation service quickly determines gaps and weaknesses.
- Governance framework provides assurances that the polices, procedures and controls are fully adopted to secure against regulatory risk.
- Delivering sophisticated solutions with workflow management, risk assessment and real-time dashboards.
- Providing metrics, reporting, controls and communications for build and run activities
- Development of a ‘digital’ framework provides the foundation for a sustainable approach to compliance.
MiFID II RTS 6 Self-Assessment Practices
- GreySpark Partners uses a risk management process to review, evaluate and validate a client’s algorithmic trading systems, governance, stress-testing, business continuity and compliance with Article 9 of MiFID II’s RTS 6 criteria.
MiFID II Health Check
The Regulators are coming…
It is clear that in the second half of 2018 the regulators and regional authorities, such as the FCA, will start to focus on firms’ compliance with MiFID II.
Regulators will inspect market participants to ensure compliance with the regulation.
GreySpark’s expectation is that institutions will see many of their non-compliant procedures exposed.
At the very least firms will need to be able to evidence activity working towards compliance.
Initial feedback to GreySpark indicates that the focus of the regulators will be on compliance within these key areas:
- Algorithmic Trading
- Best Execution
- Electronic Trading
- Pre-Trade Risk Control
- Research Unbundling
- Transaction Reporting
- Transparency Reporting
Managing your risks…
Simply altering existing policies and producing new documents, mapped to the regulatory requirements, is not enough. Regulators are looking for sustainability and enforcement throughout the organisation.
Documentation must not only meet all regulatory requirements, but also be developed in line with industry best practices, be consumable by an external regulator and be consistently deployed and implemented across the business.
A lack of top-to-bottom coordination and unclear oversight will lead to increased scrutiny from the regulator.
Establishing a governance framework and structured independent functions, providing oversight, allows for the identification of risk.
Adequate identification of risk allows for necessary adjustment to:
- 1st Line of Defence documentation
- 2nd Line of Defence documentation
- Regulatory Controls
Monitoring Adherence and Risk Management
Enabling iterative changes…
The dynamic regulatory landscape requires an operational shift in the industry’s approach to new legislation.
A ‘digital’ framework for regulatory management introduces the ability to improve the adaptability of an organisation.
By implementing the aforementioned framework, regulatory change can be realised in an iterative manner that best utilises the existing resources.
Establishing a ‘digital’ framework through GreySpark’s ability to:
- Establish organisational requirements
- Leverage industry leading market intelligence across vendor landscape
- Implement technological solutions
- Provide SME oversight
Adaptability to a Changing Regulatory Landscape
Engaging with future iterations…
There is a consistent trend of global regulatory upheaval, with advantages to be gained by firms that can best react to this dynamic situation.
Initial feedback to GreySpark indicates the current key regulatory challenges that firms are working towards are:
- Capital Requirement Directive IV (CRD IV)
- Fundamental Review of the Trading Book (FRTB)
- MiFID II implementation
- Model Risk Management (SR 11-7 & TRIM)
- Money Markets Fund Regulation (MMFR)
- Securities Financing Transactions Regulation (SFTR)
- Senior Managers & Certification Regime (SMCR)
MiFID II RTS 6 Self-Assessment Practices
Financial services firms are now being monitored up by EU regulators to review their annual self-assessment of algorithms against the MiFID II RTS 6 requirements.
Given the increased level of regulatory attention, it is important that those firms begin to consider the best approach for the self-assessment and effective operation of algorithmic trading environments.
Establishing a comprehensive and well-documented self-assessment report, measured against industry best practices and address any gaps identified.
- Produce a Self-assessment Report;
- Benchmark existing Self-assessment Reports against Industry Best Practices; and
- Support Remedial Activities and Prioritise a Programme of Work to Address Identified Gaps as needed.
Regulations are Driving Risk Management Systems to Become More Sophisticated and Integrated into Business, IT and Operational Processes