As the 21 October 2024 deadline for ASIC’s game-changing updates to over the counter (OTC) derivative transaction reporting looms, regulatory alignment platform Fund Recs is urging Australian financial institutions to prepare for a seismic shift in transparency, risk management, and market oversight. While these updates promise to turbocharge these areas, they also come with a laser focus on reporting accuracy and hefty penalties for breaches.
The upcoming changes to ASIC’s OTC derivative transaction reporting rules are wide ranging and include expanded product coverage, granular reporting requirements, enhanced data reporting standards, changed reporting timeframes, more clear hierarchy of reporting obligations, data validation and quality assurance.
Financial companies have been fined more than GBP £34.5M and almost €2.5M over the past eight years for breaches under the European Markets Infrastructure Regulation (EMIR). With ASIC’s new regulations, Australian firms must brace for similar scrutiny and potential financial repercussions warns Shane Flatman, Strategy and Business Development Director, APAC at Fund Recs.
“ASIC’s updated OTC derivative transaction reporting rules represent a complete shift in the transaction reporting landscape,” says Shane. “Immediate action is critical. By upgrading systems, optimising workflows, and investing in monitoring and oversight models, firms can adapt successfully. This proactive approach will not only enhance reporting quality but also bolster the overall stability and transparency of Australia's financial markets.
“However, the October deadline is fast approaching. Australian firms who participate in OTC derivative trading must act now to ensure compliance and mitigate the risk of substantial fines. We are ready to support firms through this transition, offering proven solutions and expert guidance to navigate the complexities of the new regulatory landscape,”
“Working with a large number of clients through the latest changes in EMIR has taught us some valuable lessons. The need for enhanced data quality and accuracy, the timely and integrated management of that data and customised reporting requirements have forced companies to adapt their operating models, systems, and processes to ensure their data governance and that oversight is rock solid and comprehensive. This includes clear data ownership, accountability, and procedures for data quality management that are reviewed and audited regularly.
“In Europe we have seen strong engagement between regulators and the industry that has greatly helped develop best practices and the management of the regulatory changes. Communication and collaboration have certainly played a big part in that successful shift,” he adds.
Fund Recs Commitment to the Australian Market
In response to these regulatory changes, Fund Recs entered the Australian market in 2022, leveraging its extensive experience with EMIR in Europe and the UK. The company's platform, designed to handle any data format through its data automation module, offers a robust solution for firms needing to adapt to the new regulations.
The company has hired Shane Flatman, an experienced professional in technology-for-funds, to drive its APAC strategy and expand their footprint in the region. Based in Sydney Shane has specialised in operational and product/sales strategy roles over the past 15 years with a robust background at Broadridge and Confluence Technologies.
Tiarnan McCaughan, Senior Market Advisor, Financial Services, Enterprise Ireland Australia/New Zealand, the Irish Government’s trade and innovation agency, welcomed the company to Australia. “Fund Recs expertise and innovative solutions are precisely what the Australian financial market needs to navigate these regulatory changes successfully, having gone through the same situations across the world. We look forward to the positive impact they can have on the market as they help organisations successfully navigate this large-scale change.”
About us:
Fund Recs specialises in reconciliation challenges for financial firms. The company’s platform provides comprehensive solutions for data automation, reconciliation, and regulatory alignment, ensuring clients can handle any data format and meet stringent regulatory standards. https://www.fundrecs.com/
Contact details:
Louise Nealon, Louise Nealon PR, louise@louisenealon.com, + 61 403569177.