In other FinTech news, Fenergo and Arachnys partner, Broadridge takes on repo trading, and IHS Markit works with RDC.
Regulators See Upside to Blockchain/DLT
Jay Clayton, SEC chairman
Bitcoin and the other so-called distributed-ledger cryptocurrencies have had a rollercoaster valuations ride so far this year, which may not be surprising to anyone who can identify Mt. Gox or knows that Tether, pitched to investors as the “more stable” cryptocurrency, lost nearly $31 million in tokens near the end of 2017.
Recently, though, SEC Chairman Jay Clayton and CFTC Chairman J. Christopher Giancarlo jointly addressed the cryptocurrency conundrum in a statement, which was published as an op-ed piece in The Wall Street Journal. Excerpts follow:
“Distributed ledger technology, or DLT, is the advancement that underpins an array of new financial products, including cryptocurrencies and digital payment services,” the two regulatory chairmen say, noting that some have called DLT the “next great driver of economic efficiency. Some have even compared it to productivity-driving innovations such as the steam engine and personal computer.”
J. Christopher Giancarlo, chairman of the CFTC
They warn, however: Beware of the “risks to all investors,” which are “high.
“Caution is merited.”
A major reason for that caution: “Many of the internet-based cryptocurrency trading platforms have registered as payment services and are not
subject to direct oversight by the SEC or the CFTC,” they observe, adding that they would “support policy efforts to revisit these frameworks and ensure they are effective and efficient for the digital era.” To read the entire op-ed, go here.
Fenergo and Arachnys Form Joint Partnership
Arachnys, a provider of cloud-based investigation management technology, and Fenergo, a provider of bank-client lifecycle management solutions, report a joint partnership. Both companies are regulatory compliance providers.
“This partnership will provide seamless inclusion of Arachnys’s due diligence research and management solution within Fenergo’s end-to-end onboarding workflow, to add global screening and KYC [know your customer] data collection capability, ensure a seamless and integrated audit trail for external information, enable automated periodic review, and accelerate onboarding and compliance for new business,” the two vendors say in a statement.
The partnership will “enable financial institutions to ensure compliance using some of the most innovative technologies and approaches seen in today’s KYC activities – such as robotics and AI [artificial intelligence] for investigative processing,” a spokesperson says in the joint statement.
Broadridge Launches Repo Electronic Trading Tool
Broadridge Financial Solutions, Inc. reports the launch of Repo Order Quote (ROQ), a “multi-market aggregation and execution tool for repo markets,” which the vendor says is “now in use with a major European bank.”
ROQ “allows repo traders to view liquidity and pricing across multiple electronic marketplaces,” according to Broadridge, which notes that the system
“enables traders to see demand and availability for each term, security, or basket of general collateral securities and also provides the ability to quote and execute on an aggregate basis.”
ROQ can be used as part of Broadridge’s integrated SFCM suite [its securities finance and collateral management software] or “interfaced with any major securities finance trading or inventory system,” the vendor says.
IHS Markit’s KY3P to Use RDC Financial Crime Database
The vendor risk management service of IHS Markit, the KY3P offering, now has financial crimes screening via Regulatory DataCorp, Inc. (RDC), a compliance screening vendor, that will be part of a due diligence toolkit, vendor officials say.
IHS Markit, an information, analytics and solutions vendor, is enhancing KY3P so that customers can “detect whether their vendors may have breached standards governing anti-bribery and corruption, anti-money laundering, sanctions and export controls,” officials say. The financial crimes screening data comes via the GRID database from RDC, officials say.
“Integrating the authoritative financial crimes database from RDC gives our customers another important dimension for screening existing and prospective vendors,” says Ellen Schubert, CEO of KY3P at IHS Markit, in a prepared statement. “Third parties are potential sources of compliance and reputational risk and financial institutions are applying maximum rigor to their due diligence processes in order to protect themselves.”
The KY3P platform “presents a holistic vendor risk profile spanning information security risk assessment, business continuity, sanctions screening, anti-bribery and corruption screening, financial risk assessment, cyber vulnerabilities and negative news assessment,” say IHS Markit officials. “It offers a standardized due diligence process and a single platform for vendor response management during major incidents.”
Barclays, Goldman Sachs, HSBC, Morgan Stanley and UBS helped design KY3P, and more than 1,500 vendors and more than 100 financial institutions have registered with KY3P since it was launched in late 2015, IHS Markit officials say.
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