A panel of experts hailing from regulatory bodies across the globe gathered today at the FIX EMEA Trading Conference to unpack what themes should be at the fore of market participants’ agendas.
A key discussion point was around the balancing act of global conformity in the face of regional disparity, and the idea of regulators playing a key role in whether regions will continue to be more or less fragmented.
One speaker suggested: “You want to give jurisdictions the ability to make their own decisions […] try to coordinate and provide mutual recognition where possible, but I think it’s sometimes not going to be the case that we’re on the same page and we have to be able to work through those issues too.”
When asked where regulators should prioritise their time, 58% of experts in the room responded that reducing existing requirements to focus more on guidelines should be the main priority for regulators across the board.
Coming in second with 23% was the recommendation to level the playing field by extending existing rules to new market participants.
Speaking to these results, one panellist agreed that the best course of action is to keep things simple in the quest for progress.
“What is detrimental is when the industry is asking for more and more precise answers, and in that you end up with thousands of pages of Q&A’s and different levels […] and questions like ‘what if that situation that will never happen was to happen in the foreseeable future?’ at some point, you have to keep it simple.”
Another speaker asserted that there is potential for the industry to self-regulate to an extent and in that situation regulators can “come in over the top, when and if necessary”.
Elsewhere, the speakers were also all in agreement about the importance of data and specifically data accuracy. Panellists agreed that it is a thread woven into almost every financial markets issue, from the consolidated tape tenders to market structure adjustments.
Linked to this, the panellists gave their distinct approaches to the consolidated tape developments, with the consensus being that if market participants want moves to be made soon, they must play their part in terms of providing the key necessary data.
While T+1 was of course a key area of discussion in the room, it appeared that across the panel, it was agreed that at present – despite huge market attention – it is in actuality not a key area of focus for the regulators themselves, with few concrete moves having been made.
However, the panellists stated that the imminent shift only further served to highlight the key idea of interconnectedness across the financial industry.
“It goes back to the interesting point that actually a markets are incredibly interconnected [and] it talks to the whole trade life cycle. Initial discussions were that it’s a back office issue and you don’t need to worry about, but actually it starts creeping into [other] aspects,” said one panellist.
Another highlighted the inevitability and irrevocability of the shift, concluding: “[T+1] will make things evolve, so it doesn’t matter what your opinion on it is. It’s happening.”