The securities compliance analysts at vendor Wolters Kluwer Financial Services have released a report outlining their predictions for the regulatory outlook in 2015, officials say. Given that only about half of Dodd-Frank has been finalized, in general the report expects that the pace of regulation will continue to increase over the course of the year.
“It has been seven years since the beginning of the financial crisis, yet the full impact of regulatory change on the strategies, business models and operations of securities firms remains unclear,” says David Thetford, securities compliance principal analyst with Wolters Kluwer Financial Services, in a statement. “While we still may not have a complete picture of the global regulatory response, firms that are prepared to anticipate and manage ongoing regulatory change will be better positioned to grow safely and profitably.”
Some of the report’s highlights include:
- Cybersecurity is at the top of everyone’s mind, which means an increased focus on technology at all firms;
- Tier 1 financial holding companies will likely have to comply with stricter capital requirements;
- Regulators’ increasing use of discretionary tools means firms are likely to become much more familiar with stress testing, solvency testing and supervisory exams;
- Most firms still do not have everything in place to comply with the Volcker Rule. More delays may tempt firms to reduce their sense of urgency, which may prove painful in the long run;
- As the regulatory focus shifts, there will be more chances to propagate rules across jurisdictions and sectors as governing bodies interpret and implement the nuances such as those of the Foreign Account Tax Compliance Act (FATCA), stress testing and liquidity and capital requirements;
- And, since the passage of the Dodd-Frank Act, the Republicans have criticized it as being too costly and inefficient, even ineffective. Republicans now in control of the new Congress see this as an opportunity to reverse and/or modify some parts of the Act.
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