Interview with William Meehan, Executive Director, Capital Markets Trading Compliance at CIBC
The Volcker rule was published in December 2013 by US regulators and requires banks with over $10B trading assets and liabilities to prove that they are not participating in proprietary trading through the reporting requirements. It is a new regulation which has limited guidance from the regulators, causing confusion among banks. At the current time, the main focus for banks is to better understand the Volcker rule and learn how to efficiently collect and analyze data in order to comply with the regulation before the deadline.
Mr. Meehan, Executive Director, Capital Markets Trading Compliance at CIBC recently spoke with GFMI about key topics to be discussed at their upcoming Strategic and Operational Challenges within Volcker Rule Compliance Conference,March 9-11, 2015 in New York, NY.
What are the key challenges surrounding Volcker implementation at the moment?
WM:Building new metrics, identifying ownership of monitoring processes (Compliance, Risk, Business, other), training personnel and finalizing policies and procedures.
How does the Volcker rule affect foreign institutions operating in the US?
WM:If you’re operating in the US, you will be subject to one or more of the 5 US regulatory agencies that passed the Volcker rule. So you will have to comply just like US banks of similar size as your institution. There is an exemption for trading foreign government obligations but that is not necessarily sufficient for a global bank that trades the debt of its home country (France) but also trades in debt of nearby countries where it has a large presence (England). So another exemption will be needed to continue in the business of proprietarily trading those foreign debt obligations. Of course there is always cross border cultural issues when US regulations go beyond US borders and affects the trading of foreign operations when the company is not a US company.
What are the implications for smaller and community banks?
WM:Volcker is not a one size fits all regulation as the regulators devised tiered compliance programs based on the size of a banks’ Total Consolidated Assets and Gross Trading Assets and Liabilities.Smaller banks only need to have a Standard Compliance program versus the Enhanced Compliance program for the bigger banks that are over $50 billion in total US consolidated assets. This means smaller banks (under $50 million) don’t need a CEO attestation and other Board and Senior Management escalation and accountability provisions. Also, banks under $10 billion in trading assets and liabilities do not need to build metrics until December 2016. Even then, they only have to produce upon request—providing a great deal of extra time to comply. However, if they will be using exemptions such as Underwriting, Market Making or Risk Mitigating hedging, they will need to build a few metrics to have evidence that they meet the requirements of the exemption come June of 2015. Smaller Technology, Risk Management and Compliance staffs make this challenging but the amount of trading desks that are in scope and the complexities of those trading desks and products should be equally reduced.
Some really small banks may even qualify for the less restrictive Simplified Compliance Program which involves adding references to the regulation in their existing policies and procedures. Lastly, banks that do not engage in covered activities (proprietary trading and investment in a hedge fund) do not need to establish a compliance program which was a change in response to concerns from community banks to the Proposed Rule which contained more burdensome requirements for such banks.
Do you believe that meeting reporting and compliance deadlines is a more difficult task for foreign and smaller institutions?
WM:I don’t believe whether you are foreign or US is a factor. Some foreign banks have such a large footprint and large staffs that they can handle the reporting and compliance deadlines just as easily as the big US banks. Smaller banks or banks that did not already have in place a robust and scalable footprint of the Volcker requirements will have a bigger implementation challenge in the technology, resourcing and procedures areas.
What would you gain from attending this conference?
WM: A better understanding of how firms are dealing with specific implementation challenges. Where are firms in terms of meeting the deadlines and what deadlines may be delayed. What, if any, parts of Volcker may be up for legislative or regulatory relief prior to the deadlines.
This GFMI conference provides financial institutions with the opportunity to better understand the Volcker rule and develop strategies in order to build compliance programs and meet compliance deadlines. On site, heads of Volcker Compliance, Dodd-Frank and Trading Compliance from financial institutions will be able to clarify ambiguous elements of the rule, overcome their own operational challenges and manage data after its collection.
Bill Meehan is an Executive Director of Capital Markets Compliance at CIBC World Markets, Corp. and Co-Editor of OTC Derivatives Regulation Under Dodd Frank, a practitioner’s guide covering all aspects of Dodd Frank swap regulations. In his current role at CIBC, Mr. Meehan is responsible for Dodd Frank Volcker and Swap Dealer regulations in addition to providing multi-asset coverage of the sales, trading and syndicate desks for Equities, Fixed Income, FXand Commodities. Prior to his current role, Mr. Meehan was the Head of Equities Compliance at MF Global Inc. Prior to that, he worked at Bank of America Merrill Lynch in a senior Equity Derivatives Compliance role.
Mr. Meehan is a member of the SIFMA Equity Markets &Trading Committee, the SIFMA Swap Dealer Committee and the Cross Border Working Group. He holds the following FINRA licenses, Series 3,4,7,24 and 87. Mr. Meehan earned his B.A. in Political Science from Saint Peter’s University where he was a Spur Honor Society recipient andreceived his J.D.from Fordham University Law School. He is a member of the State Bar of New York.
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Q&A with Clare George-Hilley, co-founder, Centropy PR
Clare George-Hilley is the co-founder of Centropy PR
Global Banking and Finance Magazine recently caught up with Clare George-Hilley, co-founder of fintech and financial services specialist PR agency Centropy, as the company toasts to three years of trading. We asked Clare about what life is like running an agency in the city, the trends she is seeing in the financial services space and what the future holds following the Covid-19 outbreak.
Why did you decide to set up Centropy PR?
I was looking for an opportunity to launch my own agency, both my husband and I had been in the public affairs and public relations industry for over a decade and we thought the time was right to go out on our own.
We could see that the financial services industry was surging, with challenger brands and new technology transforming traditional banks and setting new standards of customer service. There was a huge market opportunity to create and launch a PR agency that could provider first class comms support, alongside a deep understanding of complex regulations such as AML, KYC, and the GDPR. Likewise, many traditional technology firms are diversifying their offerings, to tap into the growing market opportunity posed by the fintech boom.
So, we worked on a business plan, designed a strategy for winning clients and officially launched in September 2017. Within a few months we had a growing portfolio of clients and a thriving business, since that point, we have never looked back!
How is Centropy doing now and what are you plans for growth?
The last three years have flown by and our client portfolio has grown and diversified quickly. We now manage PR campaigns for clients on everything from cryptocurrency, wealth management to payments and trading software.
We’ve also hosted parliamentary debates with key industry figures, including Members of Parliament (MPs) on topics such as the future of the financial services industry and the impact of challenger banks on traditional providers. The team is expanding quickly and we’re investing heavily in the latest training and support to ensure our team members are equipped to reach their full potential.
How do you see the next 12 months?
The Covid-19 outbreak has crippled the economy, forcing millions of people to work from home due to the very serious health risks. The knock-on effect of this crisis will lead to companies cutting costs where possible to save jobs, so tech will play a vital role in ensuring many businesses stay afloat.
We are already working with contactless payments specialists and other fintech companies that offer solutions to help companies survive and thrive despite the inevitable challenges ahead.
We aim to continue building our portfolio of expertise, testing ourselves with new challenges and delivering the best possible service to clients
This is a Sponsored Feature.
Lessons from past recessions and advice for business owners during the coronavirus pandemic
By Neil Davis, managing director and co-founder of Sterling Networks
What is Sterling Networks?
“Sterling Networks is a professional organisation founded in 2014 which facilitates networking events for businesses across the Midlands, Oxfordshire, Wiltshire and the South West. Over 300 members attend our fortnightly breakfast and lunchtime meetings.”
What is your background prior to establishing Sterling Networks?
“During the 1990s, I worked in the corporate team for Halifax. My wife, Tracey, and I went onto own a manufacturing business, which was also called Sterling, and produced a range of gifts, merchandise and promotional items.
“We soon realised tradeshows were a great way to meet distributors and clients. From there, the business grew exponentially, and we managed to build a network of around 500 distributors. Eventually, we became ground down by the manufacturing business – in part because the local manufacturing sector was being devastated by competition from China – and took the decision to sell the business and relocate to Spain.
“After spending several years living abroad, we moved back to the UK to set up Sterling Integrity (EXPO’S) & Sterling Networks (Networking) We were inspired by a desire to help businesses make meaningful connections with one another, and we haven’t looked back since.”
The UK has recently entered a recession, brought about by the coronavirus pandemic. What have you learned from past recessions and how are these experiences helping you to navigate the current crisis?
“I’ve lived through a number of recessions and have seen the pain that insolvency causes companies on a large scale. It’s taught me that there are those who win and sadly those who lose, and that businesses must adapt to a rise in demand for certain products or services at a time of financial crisis.
“Given the nature of what Sterling Networks offers [an opportunity for business owners to connect and grow together] I decided we could build upon the brand due to the demand for new business during the pandemic. We therefore moved our networking events from face-to-face to virtual via tools like Zoom and have gained a steady stream of new members in recent months, reaching an overall total of well over 300.
“On top of that, we’ve taken new staff on during the crisis and have launched a number of new regional groups across the country. I was determined that Sterling should come out of the pandemic with a head start, so my attitude to the recession has been much more positive than those who are forecasting nothing but doom and gloom.
“We can’t pretend high street retail wasn’t suffering long before the pandemic came along, and thousands of new businesses are sure to start up to meet the demand for the products and services that people require at a time such as this. In order to develop and grow businesses need to focus on where changes need to be made to meet this demand.”
Sterling Networks has been providing emotional support to its members throughout the pandemic. What advice have you been giving to members that could be useful to other business owners?
“I try not to be too opinionated and respect other people’s views when giving advice to members, as there are always two sides to every circumstance. I’ve been careful not to say to people that they should be doing one thing or another, as I don’t know their business and its needs quite like they do. The only thing that I have been telling members is the importance of setting up one-to-ones with one another. By doing so, they can listen to the needs and concerns of other, like-minded business owners and work out ways that they might be able to help one another.
“The pandemic has meant we all have a bit more time on our hands, so the advice I would give to people is to use this extra time wisely. Not having to travel physically from one meeting to another means there is a greater opportunity to connect with more people. It’s important to remember that individuals outside of your business can be just as valuable as those within it.”
What makes you hopeful for the future and are there any words of encouragement you can give to budding entrepreneurs?
“The key events that have happened to this country during my lifetime – whether wars, recessions, or the pandemic – have enabled me to take stock of things. While these experiences are certainly challenging, we all become stronger for living through them, and it gives me great confidence that the world will ultimately improve as a result of the pandemic.
“The whole world is effectively rebooting right now, as is the business community. I like to think entrepreneurs will recognise this opportunity to take better care of their peers, and this translates to greater collaboration between organisations. Speak to as many people as you can, ask all the questions that you need to and do your homework. This might well be a difficult time for us all but planning for the future must start now if it is to become as prosperous as I know it can be.”
Exclusive Interview with Ugo Loser, CEO of ARCA Fondi SGR
Arca Fondi SGR is a mid-sized Italian active asset management company. Founded in 1983 by a consortium made up of 12 regional banks, the company has grown in time, expanding its network of distributors and its client base. Nowadays Arca manages Mutual Funds, Pension Funds and Institutional Accounts with total AUM exceeding 30 € bln, reaching more than 100 banks and financial institutions and serving more than 800,000 final clients.
What are the key contributors to ARCA Fondi SGR’s success over the past 35 years?
Arca has always put clients and distributors first. That is to say we have always privileged fair pricing for funds and developing high quality products and services for our customers. This requires constant innovation as an objective and looking for people’s talent to be free to produce its effect
Why are people the founding element of ARCA Fondi SGR and how have you sustained this vision over the years?
We work in small teams, people are young and motivated and can perform duties with a high level of autonomy and responsibility. Innovation is asked to everyone, everyday
What makes Arca Fondi SGR different from other asset management firms in Italy?
Arca is a company focused on doing what it can do very well, that is to say mutual and pension funds, services for clients and banks. We never follow short term trends but always look for long lasting impact on the industry, like we’ve done may times in the past
What products/services has ARCA Fondi SGR pioneered?
Arca has been the inventor of “Arca Cedola”, fixed-horizon, coupon paying funds, which have been with no doubt the greatest product innovation of the past 12 years on the Italian market. This type of funds, at first strictly based on bonds and later as a balanced product, has encountered an enormous success both with clients and distributors due to its simple and effective value proposition. Arca is a market leader also in the “PIR” segment of funds, a range of product focused on mid and small sized companies, that have been the best performers in the Italian stock market for the last few years. In services, Arca is a leader in technology applied to asset management. Our website, app and digital services for clients and banks are award winning, state of the art combination of data, technology and channels, and the best is yet to come on this side.
What strategies do you have in place to sustain your market position and withstand professional competition in the country?
As I mentioned, we do not waste resources on projects with dubious results, instead we constantly invest on people, products and services. The high level of profitability that Arca has been able to maintain even in difficult years for the markets of the banking sector is a further testimony that this strategy works very well
How do you use technology to create meaningful experiences for your customers?
First of all, we have created a whole new division, Arca InnovAction Lab, dedicated to technology, data and processes. This ensures projects are delivered quickly and they are free to leave bad past practices behind. Arcaonline.it, Arca’s website, provides distributors with detailed information on clients’ portfolios, asset under management and subscription/redemption requests. It monitors aggregate selling data offering to our partners a suite functions and analytics to track commercial campaigns. And if the banks branches need assistance, they may ask Sara, our digital chatbot. A broad and timely multimedia production, covering exclusive reports, comments, presentations, videos, webinars and newsletters is also available on the website.
Customers, subscribing Arca’s funds through its distributors’ network, may access Arcaclick, a dedicated area on Arcaonline.it. With Arcaclick the client can easily browse through her portfolio of funds, analyze its characteristics, view transactions and historical funds’ performance in customizable views. Arcaclick is also a powerful source of information on Arca product range: Prospectus, KIIDs and other literature is easily accessible along with news, comments and reports. Arcaclick may also be accessed via Arca Fondi App, a free application for mobiles and tables, running on both iOS and Android. Available 24/7 and in mobility, Arcaclick gives clients the opportunity access information, news and details of their personal portfolio anytime and anywhere.
What key trends will drive pension growth in 2020 and beyond?
The Italian market for pension funds is still very small and therefore there is a great opportunity to grow. Arca Fondi manages the biggest open ended Italian pension fund and it’s been constantly at the top of its rankings. As people and workers are looking for yield and to weather short term volatility, the pension fund is very well poised to profit from this trend.
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