The sun did not set on Eventus team members appearing at insightful conferences around the world this Spring. And that was the case in April when our team spoke at four separate conferences across three continents to weigh in on the state of the industry and the changing tides in regulatory and digital asset markets.
Here are our top five takeaways based on various engagements with clients and prospects in the compliance industry:
1. Well-regulated markets are safer and more trusted
Mike Castigione, Director of Regulatory Affairs, Digital Assets, spoke on a panel at SALT Crypto Bahamas and noted that as interest in crypto continues to grow, the industry understands that regulation will dictate the future of the asset class. FTX CEO Sam Bankman-Fried noted he spends half his time focused on crypto regulation, including traveling to Washington D.C. to speak with U.S. lawmakers. Other regions are waiting to embrace crypto should the U.S. or Europe not settle on workable regulatory solutions—Bahamian government leaders kicked off the conference to illustrate this point. Government and institutional knowledge of the market is beginning to influence regulatory debates such as anti-money laundering (AML), fair and transparent disclosures and trade surveillance.
2. Lack of delivery is a key hurdle for compliance providers
Our Chief Product Officer, Ollie Cadman, spoke with industry insiders at the Eventus Risk and Surveillance Forums in New York and London. One key theme that resonated throughout was that there has been a definitive shift in how financial institutions look at surveillance and monitoring providers. Financial institutions need a trusted surveillance provider who can best deliver on their promise, be flexible and responsive to client needs and help navigate how to fulfill regulatory obligations. Providers also need to be sage advisors to help clients navigate next steps and future-proof for regulations that are still evolving.
3. Automation is the future of AML and CTF risk management
Vince Turcotte, Director Digital Assets, Asia Pacific, spoke at RegTech Asia. Artificial intelligence, robotic process automation and machine learning all have made extraordinary advances in the last few years, and are really the only effective way of managing the volume of data needed to find bad actors.
But humans are not off the hook; these technologies are also rapidly increasing the need for correct methods to sort through volumes of data and data types to find actual risks, without reducing speeds from false positives—that piece needs the human element to succeed. And the humans at the helm need to be able to show regulators how their AI works and why it is structured the way it is.
4. Enforcement is focused on new markets and existing regulations
Joe Schifano, our Global Head of Regulatory Affairs, spoke on a panel at the FIA Law & Compliance Division Conference. While much of the enforcement discussion has focused on new markets, regulators also engaged in ‘Back to Basics’ issues, with many of the recent enforcement issues focused on compliance with rules that are 10 years old or more. One regulatory insider noted that surveillance is vital to compliance, and an institution not effectively surveilling is not effectively supervising. The industry is also seeing the chickens coming home to roost on poorly set parameters and the failure to deploy proper monitoring systems.
5. The pace of new crypto regulation is speeding up
David Griffiths, our Director of Regulatory Affairs, spoke at CityWeek in London. He notes that in the E.U., regulators are ramping up their handling of crypto registrations, adding requirements for AML to cater for different custody models, and discussing new regulations for crypto. With traditional exchanges, they are looking for ways to integrate crypto and innovate to build resilience across its platforms.
The U.S. and APAC are not far behind, with the White House executive order on cryptocurrencies setting a hopeful tone on the focus of U.S. regulators in light of SEC and CFTC moves to increase crypto scrutiny.
As Eventus continues to engage with clients, regulators and other industry stakeholders at various events and conferences throughout 2022, we remain vigilant of evolving regulations across all jurisdictions and asset classes. Stay tuned for where we end up next and feel free to book a meeting with us to discuss your regulatory and compliance needs.
Eventus is a leading global provider of multi-asset class trade surveillance and market risk solutions. Its powerful, award-winning Validus platform is easy to deploy, customize and operate across equities, options, futures, foreign exchange (FX), fixed income and digital asset markets. Validus is proven in the most complex, high-volume and real-time environments of tier-1 banks, broker-dealers, futures commission merchants (FCMs), proprietary trading groups, market centers, buy-side institutions, energy and commodity trading firms, and regulators. The company’s rapidly growing client base relies on Validus and Eventus’ responsive support and product development teams to overcome its most pressing regulatory challenges. For more, visit www.eventus.com.