U.S. regulators issued the U.S. QFC Resolution Stay Regulations as part of a broader set of regulations devised to tackle the “too big to fail” problem arising from the 2008 financial crisis. This article takes a closer look at QFCs, the origins of the U.S. Resolution Stay Regulation, and the remediation options available to firms as regulators ramp up efforts to prevent taxpayer-funded bailouts of GSIBs.
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Large Banks Prioritize Machine Learning as New Operating Models Emerge and Regulatory Scrutiny Mounts
Machine learning (ML) has increasingly been delivering value for large financial institutions as they invest in the technology to attract new customers and streamline operations. Recent advances in the technology underpinning artificial intelligence (AI) have enabled financial institutions to explore the application of ML techniques in their client facing operations.
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Consolidated Audit Trail: A Reaction to the 2010 “Flash Crash"
The Securities and Exchange Commission (SEC) ordered the creation of the Consolidated Audit Trail (CAT) in 2012 after regulators realized that they did not have enough market data to explain the Flash Crash that occurred in May 2010. CAT addresses the audit trail of all transactions, providing information and checks and balances for market activity. In fact, CAT greatly expands on the requirements of the Order Audit Trail System (OATS) regulation, which was adopted in 1998.
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Accelerating Investment and Innovation Fuels Growth in Regulatory Technology Solutions
The current RegTech landscape spans the technological spectrum from static data processing and reporting solutions to dynamic real-time transaction monitoring platforms. RegTech companies utilize emerging technologies such as machine learning, data analytics, artificial intelligence, cloud computing, biometrics, blockchain, cryptography, and many others to deliver solutions that enable faster, more accurate, and less labor-intensive compliance for various financial regulatory regimes.
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Qualified Financial Contract (QFC) Recordkeeping Rules – Avoiding Reconciliation Delays and Legal Uncertainties During Bank Failures
Following the collapse of Lehman Brothers in 2008, the Dodd-Frank Act granted the FDIC Orderly Liquidation Authority (OLA) powers to serve as the receiver of a complex financial institution and prevent counterparties from terminating Qualified Financial Contracts (QFCs) with the firm. This paper examines some of the specific reporting rules put in place to enable a rapid reconciliation of QFCs under the OLA.
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Non-Financial Regulatory Reporting: The Growing Challenges Facing Financial Services Firms
One of the largest areas of regulatory growth since the financial crisis has been in the area of Non-Financial Regulatory Reporting (NFRR). Three key challenges for firms going forward will be: coordinating NFRR efforts across the firm, establishing robust data governance, and managing reporting requirements that vary across time and jurisdictions.
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