Do you have a complaint to share about being compliant?

Regulatory compliance is complex, moving, and cross cutting (more in “Eight reasons Bankers and Fitnech startups are “up at night” at bout compliance”). Deloitte points out that most Regtech up to now has focused in the payment and lending areas but there are needs in different areas. The key is the agility of the regulatory technology that is being developed. See “Is Regtech the new Fintech? Is RegTech the new FinTech? How agile regulatory technology is helping firms better understand and manage their risks”.

London and Dublin seem to be developing as the hubs for Regtech, beating Silicon valley. A few of the names in our database are (if we are missing any, please point it out in the comments below; the list is focused on compliance solution excluding those for strict operational risks and KYC):

Suade (UK)

FundApps (UK)

FundRecs (Ireland)

Corlytics (Ireland)

AQmetrics (Ireland)

SilverFinch in partnership with Fundsquare (Ireland – Luxembourg)

Vizor (Canada)

Nextangles (US)

Bancalis (Germany)

Off the beaten track of the Regtech geographic cluster, we spotted another Regtech company out of Israel. Cappitech was spun out of ITG, an established broker in equity derivatives. Their core service is the Capptivate system. It is focused on EMIR reporting requirements.

EMIR is not related to the Emirates but MiFiD (keep breathing; MiFiD1 and MiFiD2 naturally). EMIR, European Market Infrastructure Regulation, was born in 2012 but was conceived following the 2008 subprime crisis (a “nuclear” accident with many OTC explosives involved). EMIR keeps changing specifications (what’s new) and covers OTC derivatives. Any broker, hedge fund, individual trader dealing in CFDs, flex equity derivatives, binary options, non-deliverable forwards, credit default swaps (CDS), certain currency FRAs etc. knows EMIR from birth. It is a complex ESMA framework simply because the underlying market is so Not standardized and often not clearing through a Central Counterparty Clearing (CCPs). Capptivate covers the necessary requirements from uploading trade reports, to validating them, and sending them directly to the associated trade repositories.

EMIR is extremely demanding compared to the US and Australian analogs. It is so strict that even those using derivatives for hedging purposes (e.g. Treasury dept of corporates) are required to report.

Ronen Kertis, CEO of Cappitech, explained to Finance Magnates:

“Our understanding is that there are about 1 million organizations meant to report under EMIR, where only 25% of them do.”

Cappitech is offering an inexpensive Saas based technology for banks, corporates, brokers to outsource their EMIR reporting needs. When I asked Cappitech the question “How long does it take for your clients to become compliant?”, he could have answered, “how long is a piece of string?”, but I got a more define the answer “as quickly as 4 weeks”.

By Efi Pylarinou