One of the lesser known financial regulations implemented as part of Dodd-Frank is the requirement for swap dealers to be able to produce a full reconstruction of a trade within 72 hours of a request by the Commodity Futures Trading Commission (CFTC). Satisfying the new requirement will require a range of technologies and processes, many of which are still in their infancy.
Bloomberg Vault sponsored a webinar “Tackling the Challenges of Trade Reconstruction,” exploring issues such as:
• Handling unstructured data, including tagging
• Weighing in-house versus outsourced solutions
• Establishing best practices around compliance
“The new rules [regarding trade reconstruction] are onerous and affect lots of different parts of the organization—front, middle and back office of firms,” said Harald Collet, Global Head of Bloomberg Vault. Those rules cover such areas as:
• Recordkeeping: Records must be kept of all written and oral communications that lead to execution of swap.
• Searchability: Data must be maintained in a form that identifiable and searchable by transaction and counterparty. (read more…)
Gina McCarthy, the administrator of the Environmental Protection Agency, discussed Sec. 111(d) of the Clean Air Act, which deals with carbon emission reductions, at a webinar hosted by the American Sustainable Business Council on Sept. 4.
McCarthy said the rules proposed in the EPA’s Clean Power Plan are part of President Barack Obama’s climate action plan. “Climate change is a risk to health, business and economic growth,” she said, adding that small business owners overwhelming want action taken on the issue. And she’s proud of what the EPA is doing by developing standards to control air pollution, much of which comes from plants that generate power by coal, natural gas and petroleum.
McCarthy explained that the rule-making process took into account views from industry, unions, state officials and others. The EPA’s goal, in addition to cutting carbon emission was to make sure that the rules “can change climate economic risks into opportunities,” she said. (read more…)
CFTC regulations on trade reconstruction are changing the way firms need to think about compliance. Here’s a step-by-step guide to get started.
The Dodd-Frank Act unleashed an avalanche of new rules affecting the financial industry, chief among them the trade reconstruction requirement, which mandates that swap dealers are able to produce a complete reconstruction of a trade within 72 hours of a request by the Commodities Futures Trading Commission (CFTC). To solve for this complex challenge, swap dealers/firms must develop capabilities for correlating a broad range of structured and unstructured pre-trade, trade and post-trade data.
Bloomberg Vault recently hosted a webinar “Trade Reconstruction for Compliance Officers,” presented by Harald Collet, Global Head of Bloomberg Vault, and moderated by Mitch Avnet, Managing Partner, Compliance Risk Concepts, to help compliance officers understand the challenges and think strategically about the process.
“The endpoints of the reconstructed trade is to tie together the different elements: The structured data, including execution and post-execution confirmation and ledger data; unstructured data, such as sales and marketing; and finally communications data, the most complex data,” says Collet. (read more…)