Risk & Regulation
The banking world has undergone major changes in the last few years due to the regulatory requirements. The continuous and rapid development of bank and capital market regulation is accompanied by continuously evolving as well as new requirements that have to be fulfilled by the affected financial institutions. New requirements of the calculation of equity requirements for market and credit risk and transaction-based reporting to the notification register are two examples of new qualitative requirements.
With the SFTR, Brexit and the Benchmarks Regulation and the associated replacement of reference interest rates by new risk-free interest rates, additional regulatory provisions are around the corner. The result is that the product design, processes and systems of financial institutions will undergo critical changes. The more stringent requirements placed upon risk-controlling processes thus lead to a significant need for the banks to adapt.
Our experts observe and analyse all new regulatory requirements. From this, we derive the relevant changes for our clients. Based on what we learn, we develop implementation-oriented strategies and concepts which we tailor precisely to our clients and their needs. We not only support you in the integration of new regulatory requirements and their implementation, but we also provide comprehensive consulting with regard to change management and the further development of your IT systems.
- Design and implementation of model-based equity requirement calculation
- Analysis and implementation of regulatory requirements
- Implementation of transaction-based standard and ad-hoc reporting in Capital Markets and Treasury
- Implementation of risk and regulatory reporting using standard software
- Assurance of data availability and quality, data transformation in reporting structures
- Support in the preparation and coordination of audit reviews and stress tests
Integration of a Regulatory Reporting Hub to comply with MiFID II and EMIR
Within the framework of MiFID II, an international exchange group headquartered in Frankfurt decided to set up a reporting hub aimed at the fulfilment of transparency and reporting obligations for their clients.
Business design and implementation of the initial margin requirements
Firstwaters supports a number of banks in analysing the business requirements related to initial margin and advises on the technical implementation in the existing banking systems.
Implementation of risk and regulatory reporting in Capital Markets and Treasury
Since the financial crisis, many new reporting requirements have been issued and defined by the supervisory authorities as part of the EU-wide harmonisation of banking and capital market regulations. In the past few years, Firstwaters has supported a number of banks and financial service providers in the successful implementation and generation of these requirements.
Introduction of a Regulatory Reporting Hub to comply with MiFID II and EMIR
Firstwaters supported the client in the design, implementation and testing of the service platform with a team of more than ten business and technical consultants. The combination of business expertise, technical skills and methodological know-how at Firstwaters made a particular contribution to the success of the project.
After the successful launch of the reporting hub, we are now supporting the client in the functional development of the platform and the set-up of additional reporting services.
Functional conception and implementation of the Initial Margin requirements
Firstwaters supports a wide range of banks – from analysing the business requirements and alternative actions, designing a tailored solution and implementing it in the existing banking systems, through to supporting the test phase, of course also with other counterparties and external service providers such as AcadiaSoft.
Due to the coronavirus pandemic, the beginning of phases 5 and 6 – which involved the integration of the security obligation for non-centrally cleared derivative contracts with initial margin – was postponed to September 2021 and September 2022.
However, we continue to work intensely on the projects already started in order to maintain the momentum, and so that the requirements can be met not only on time but even in advance, because these generally involve completely new and cross-departmental workflows.
Risk & Regulatory Reporting in Capital Markets and Treasury
In the area of banking regulation, we have acted as a reliable partner to support our clients in the design, implementation and testing of notifications to supervisory authorities with regard to solvency (market price risks, credit risks), liquidity (LCR, ALMM, asset encumbrance), financial reporting (FINREP framework) and credit register (AnaCredit).
Our team also boasts a comprehensive track record of successfully implemented projects in the area of capital market regulation. In this regard, our long-standing expertise in particular in the implementation of transaction-based reporting requirements under EMIR, MMSR, MiFID II/MiFIR, SFTR and FMIA/FinfraG.
Currently, we are supporting the German subsidiary of an international commercial bank in the implementation of the European notification requirements in accordance with the COREP and FINREP frameworks using BAIS (BSM/MSG), as well as a German state bank in the implementation of a reliable and precise LCR preview calculation for the modulation of the minimum rate based on Ambit Focus (FIS).
For further insights, get in touch with our experts regarding the subject of risk and regulation.