Sapient Global Markets Survey Reveals Escalating Trade Reporting Costs and Concerns over Maintaining Compliance
Respondents believe current approaches mean costs will increase by at
least a quarter in next two years, lack the adaptability, scalability
and flexibility to meet new requirements
Global Markets, a leading global provider of business technology and
consulting services for the capital and commodity markets, today
announced the findings of a new survey examining industry attitudes
towards OTC derivatives trade reporting.
Driven by aggressive compliance timelines, existing technology and
available budgets, market participants have tackled the regulatory
reporting requirements under Dodd Frank and EMIR in a variety of ways.
With these regulations well established, and to ascertain how the
industry has progressed in complying with them, Sapient Global Markets
conducted a survey of buy and sell-side firms during the International
Swaps and Derivatives Association (ISDA) 2015 AGM.
The overall picture that emerges from the survey is one of an industry
that has invested heavily in in-house systems (72% of respondents) to
meet reporting requirements. However, despite sizeable investment, firms
are struggling to overcome the complexity and manage the costs of
maintaining compliance due to the implementation of disjointed, siloed
approaches to trade reporting. The significant findings from the survey
The majority of firms, whether using a vendor solution or in-house
application, see costs rising substantially over the next two years.
Of those using in-house systems, 61% expect costs to rise by a minimum
of 25%, with 26% expecting costs to increase by more than 50%.
Although the factors for the rise in costs vary, the primary reasons
stated by respondents were; concerns around maintaining reporting
systems, the adaptability of systems to meet evolving requirements and
improving ongoing compliance.
The biggest trade reporting challenges for firms were cited as
remaining compliant as rules change (35%), data quality and data
management (27%) and maintaining and updating existing systems (25%)
"It is apparent from these findings that existing approaches to trade
reporting have created inconsistent processes, resulting in significant
operational, compliance and cost implications," commented Randall Orbon,
senior vice president at Sapient Global Markets. "Firms, particularly
those that have invested heavily in internal solutions, now face a
fundamental question: can they afford to continue down this route and
remain compliant? They must also determine whether this approach offers
the flexibility and scalability to accommodate further regulatory change
as rules evolve and new requirements, such as MiFID II, come in to
force. Those decisions need to be made now because the level of ongoing
investment required keeping these systems running is uneconomic for a
function that offers no competitive advantage."
To download a full copy of the survey results, please visit the Sapient
Global Markets Trade Reporting survey paper.
About Sapient Global Markets:
Sapient Global Markets, a part
of Publicis.Sapient, is a leading provider of services to today's
evolving financial and commodity markets. We provide a full range of
capabilities to help our clients grow and enhance their businesses,
create robust and transparent infrastructure, manage operating costs,
and foster innovation throughout their organizations. We offer services
across Advisory, Analytics, Technology, and Process, as well as unique
methodologies in program management, technology development, and process
outsourcing. Sapient Global Markets operates in key financial and
commodity centers worldwide, including Boston, Calgary, Chicago,
Dusseldorf, Frankfurt, Houston, London, Los Angeles, Milan, New York,
Singapore, Washington D.C. and Zurich, as well as in large technology
development and operations outsourcing centers in Bangalore, Delhi, and
Noida, India. For more information, visit www.sapientglobalmarkets.com.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150708005246/en/
Sapient Media Contact:
Sapient Global Markets
Whitehouse, +44 (0) 207 456 6550
Source: Sapient Global Markets
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