CMU PROGRESS PAVES WAY FOR RETURN OF INNOVATION

Mark John, head of product and business development EMEA at BNY Mellon’s Pershing, comments on the European Commission consultation on the Capital Markets Union (CMU) programme, which closes today:

“Many market participants are currently too focused on keeping their heads above the water with the pace of regulatory change to make full use of the opportunities CMU offers.

“It is without question a positive development, but in the short-term both the buy and sell-side are dealing with only the compliance aspects, alongside their more pressing MiFID II requirements. Many firms are compounding their challenges by addressing regulation on an individual basis, without the resources or infrastructure in place to benefit from the efficiencies gained from a holistic approach.

“By the end of 2019, after the implementation of CMU, the industry will be in a better position to reflect on a decade’s worth of post-financial crisis, regulation-driven progress. A short period of evaluation, with necessary adjustments to the systems and processes that have been built, will then lay strong foundations for long-awaited innovation.

“This groundwork, in conjunction with the opportunities the CMU offers, will provide the basis for innovation that will finally allow financial services firms to move forward with exciting, revenue-generating projects from 2020.

“Firms on both the buy and sell-side have been suffering from a tunnel vision leading them to compartmentalise regulatory projects, adding challenges and implementation costs. Companies which build a holistic plan based on their desired end result will not only comply with the current cycle of regulation more efficiently, but will be best placed to take advantage of the innovation opportunities which follow in a strengthened and transparent financial world.”

Mark John, head of product and business development EMEA at BNY Mellon’s Pershing, comments on the European Commission consultation on the Capital Markets Union (CMU) programme, which closes today:

“Many market participants are currently too focused on keeping their heads above the water with the pace of regulatory change to make full use of the opportunities CMU offers.

“It is without question a positive development, but in the short-term both the buy and sell-side are dealing with only the compliance aspects, alongside their more pressing MiFID II requirements. Many firms are compounding their challenges by addressing regulation on an individual basis, without the resources or infrastructure in place to benefit from the efficiencies gained from a holistic approach.

“By the end of 2019, after the implementation of CMU, the industry will be in a better position to reflect on a decade’s worth of post-financial crisis, regulation-driven progress. A short period of evaluation, with necessary adjustments to the systems and processes that have been built, will then lay strong foundations for long-awaited innovation.

“This groundwork, in conjunction with the opportunities the CMU offers, will provide the basis for innovation that will finally allow financial services firms to move forward with exciting, revenue-generating projects from 2020.

“Firms on both the buy and sell-side have been suffering from a tunnel vision leading them to compartmentalise regulatory projects, adding challenges and implementation costs. Companies which build a holistic plan based on their desired end result will not only comply with the current cycle of regulation more efficiently, but will be best placed to take advantage of the innovation opportunities which follow in a strengthened and transparent financial world.”