Regulatory Solutions Solvencyii

Chris Johnson Interview: Regulatory Solutions | Solvency II Regulation

Chris Johnson, Head of Product Management, Market Data at HSBC Securities Services, discusses how financial data management professionals are preparing for the new regulation that is coming their way and what their challenges and opportunities are.

Professionals are gaining further understanding on regulations (Dodd-Frank and FATCA, MiFID, Solvency II regulation and others) therefore they are working on making the regulatory solutions consistent and cost effective.

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Transcript:

Interviewer: Chris you chaired the regulatory sessions yesterday for the whole day. Tell us how is the industry preparing for all the new regulation that is coming your way? What are the challenges? What are the problems? What are the opportunities?

Chris Johnson: The new regulations and there are many, we are making sense of those regulations. What we spent time on yesterday was to work through the likes of Dodd-Frank and FATCA and the ELIER and AIFMD, MIFIA, MiFID, Solvency II and so forth.

What we established is that there are commonalities across those regulations. We need to have consensus on those so that when we build our regulatory systems we are consistent. So the end clients and the regulators see the same thing and so we have an immediate need to reach consensus on those. So a big push yesterday was on making the regulatory solutions consistent and cost effective, with the help of our peers and our vendors and the industry.

Interviewer: We all heard the Legal Entity Identifier presentations and the panel. Do you personally see the light at the end of the tunnel? Are we going to get there within a year, within five years? Are we going to have Legal Entity Identifiers?

Chris Johnson: I’m quite confident that the initiative for Legal Entity Identifiers is progressing and that we have a first tranche. Yes it’s really a case of how it happens. The concern really is the road map for delivery. There’s a first tranche next summer. But future tranches, we’ll need to see how the inter-relationship between entities and their parents and ultimate parents. How the whole of the relationship between the different types of entity and how the LEI will operate within that. That’s the piece that we don’t see. It’s very, very early days.

Interviewer: Speaking of relationships how has the relationship between your data department and your board of directors changed? Do they see you differently? Do they relate differently to you? Do they have different expectations?

Chris Johnson: It’s been a game of two halves for me. I started off in data management on the sales side in investment banking for a different organisation. I moved across to the buy side through a fund manager and now for the last five years at HSBC Security Services. What I’ve found is that the governance and the understanding of data management is so much stronger on the buy side. The reason for that is because it is the life blood of the business. So quality has to be top. It’s heavily regulated. It’s heavily audited. The client’s all over the quality of the data.

So we actually have incredibly strong governance and very strong procedures which is great because the retail investors are buying and selling funds. Since I moved onto the buy side I’ve got so much more confidence in the financial system. I think the challenge is to make that consistent across the financial services.

Interviewer: In terms of the data management profession, we spoke about this before when you were sitting on a panel discussing the changes in the data management profession. How has it changed in your lifetime? Have you got different colleagues to the types of colleagues you had 10 years ago? What’s changed?

Chris Johnson: Yes there are so many changes happening. Along with investment management, investment operations, the administration, there is a shift to near shore and off shore. So one of the biggest challenges is finding the subject matter experts, the practitioners, the stewards, to make decisions and to take leadership because the training ground, if you like, has shifted. Whereas historically it would have been more London and the – well basically London, that’s shifted now. So the training for the bright young things is more a challenge now. But as far as my experience is that data management certainly has much more kudos now than it had 10 years ago when I started.

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