Proof yet again that the US regulatory community might not be aware of the implications of the Office of Financial Research reform proposals comes in the form of recent comments made by Philadelphia Federal Reserve Bank economist Leonard Nakamura. Nakamura made proposals last week that an all encompassing instrument database be established to help regulators to monitor systemic risk, but failed to note that the Office of Financial Research proposals include a similar idea, albeit focused on systemically important financial institutions.
Up until now, the proposals for the creation of a reference data utility in the form of the Office of Financial Research have largely passed under the radar during the regulatory reform debates in the US. However, data issues are set to be a key topic of discussion this week with the Office of Financial Research and living wills on the agenda for the regulatory conference on the Wall Street reform bill.
The market fragmentation that has been a major by-product of the introduction of MiFID has resulted in a number of serious data related issues in the OTC space in particular, said Tom Davin, managing director of the Washington-based Financial Information Services Division (FISD) of the Software & Information Industry Association (SIIA), at the recent MiFID JWG reunion meeting. Regulators are therefore tackling the post-trade space by attempting to introduce a new focus on data quality and timeliness, but the current set of proposed data standards for instrument identification may not be sufficient, suggested Davin.
The 22 respondents to the Securities Industry and Financial Markets Association’s recent survey (Sifma) believe that regardless of the exact structure of the systemic risk regulator, its roles and responsibilities for the overall markets should reflect those of a firm’s chief risk officer (CRO). The Sifma member firms, regulators, clearing counterparties (CCPs) and exchanges involved in the survey also said they feel that the data challenges involved in monitoring systemic risk could prove costly, might not require the building of a new infrastructure and should not be focused on too granular a level of data.
Firms need to keep a close eye on what is shaping up to be MiFID II, under the auspices of the Committee of European Securities Regulators’ (CESR) consultation on post-trade transparency (see our recent coverage 
The plans for the establishment of a US-based reference data utility in the guise of the Office of Financial Research continues to make its way through the US political system and it seems that many of those from the risk management world feel it will make a difference for the better. The Professional Risk Managers’ International Association (PRMIA) has given its seal of approval (see our coverage 
As a follower of a number of risk manager groups on business networking site Linkedin, I have seen one topic crop up over and over again: namely whether or not enterprise risk management (ERM) is a fallacy or not. The vendor community has certainly taken up the cause with gusto, but it seems that many in the risk management function are unsure of exactly what constitutes ERM or whether or not there are any true examples of the practice in the market today.
The current regulatory focus on improving the monitoring of systemic risk at a global level is certainly a laudable aim, but the practical reality of drawing together a unified database that provides risk exposure data at an industry wide level is easier said than done. A recent Bank for International Settlements (BIS) working paper, written by researchers Stephen Cecchetti, Ingo Fender and Patrick McGuire, examines the challenges involved in producing such a global risk map in order to support a two step approach to systemic risk monitoring. 
Earlier this month, Swift released its programme for the conference behemoth that is Sibos, this year to be held between 25 and 29 October in Amsterdam. The industry owned financial network operator has indicated that it will be focusing on the three Rs it believes to be the most important to the market at the moment: regulation, rebuilding trust and recovery. But how much do the other two equally important Rs, risk and reference data, factor into the equation?
The new transparency requirements that are being mooted as part of the MiFID review process by the Committee of European Securities Regulators (CESR) have resulted in a surge of interest and investment in the middle office, according to panellists discussing operational risk at last week’s Xtrakter user conference. Godfried De Vidts, director of European Affairs at Icap, explained that the need for a more harmonised approach to the post-trade space is being highlighted by the push for greater data transparency and the fragmentation of the clearing environment with the addition of new central clearing counterparties (CCPs) on the scene.
A joint working group of the Committee on Payment and Settlement Systems (CPSS) and the Technical Committee of the International Organisation of Securities Commissions (Iosco) has published a consultation paper this week setting out recommendations for the operation of trade repositories in the OTC derivatives markets. Data sharing and new data infrastructure is a subject that has been much discussed over recent months (see 
Risk and regulatory reporting solution vendor FRSGlobal is currently endeavouring to develop new valuation models in order to gauge the fair value prices of emission linked derivatives contracts, according to Willi Brammertz, senior risk advisor at the vendor. Although political concerns are holding back some degree of progress with regards to these new instruments, Brammertz is confident that Europe is moving forward enough for vendors to begin dipping a toe in the water of this new area of financial instrument development. FRSGlobal is eventually planning to add this new functionality to its RiskPro platform.
The Committee of European Securities Regulators (CESR) has issued a consultation paper on post-trade transparency this month, which indicates that European firms may soon face a whole host of new data requirements for structured products. The paper, which is part of the ongoing MiFID review process that is being conducted over the course of this year (see our recent coverage 
In light of the current review of MiFID going on at the European level (see recent coverage 
US Republican senator Richard Shelby may be sceptical about the Financial Services Bill’s proposals for the establishment of a data collection agency (see 
Following the publication of the new agreed template for the global collection of hedge fund data by the International Organisation of Securities Commissions’ (IOSCO) Technical Committee in February (see our coverage 
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Given that the Office of Financial Research has been a hotly debated topic within the industry of late (even if the regulatory community has been rather quiet on the subject, see here), it is no surprise that vendors are keen to offer their services to those charged with establishing such a data utility. One such vendor is EDM specialist GoldenSource, which has been sitting on a panel with IBM to discuss the development of the utility for some time, explain CEO Mike Meriton and Tom Stock, senior vice president of product management.
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