I recently attended the FIA Law and Compliance conference in Washington, DC. It was my first time joining our general counsel at this conference, and I thought I’d share some of my experiences there.
The conference allowed me to look at the issues and initiatives we are introducing at TT from a different angle: compliance with the exchange rules and industry regulations.
From MiFID II to the Volcker rule implementation, I was somewhat overwhelmed by the number of topics covered.
As a technology provider in the financial space, we usually are not impacted directly by the changing regulatory landscape; but seeing and hearing about the important issues that are on the plate of every market participant allows us to think about the things we can do better, or differently, to help our customers cope with the evolving rules.
Quite a few panels touched on cyber security and how to ensure that firms are protected from cyber threads. My favorite was the discussion with General Michael Hayden, a retired four-star general who previously served as director of the CIA and NSA. He discussed the topic with a lot of passion and color. The point he made as a conclusion was that it is up to us as a society to decide where we want to draw the line between how much privacy we are willing to give up versus how secure we would like to feel, and the governmental agencies will be able to execute based on that.
This topic really hit close to home, especially when thinking about our own software-as-a-service (SaaS) platform, TT. Security is something that we obviously care deeply about, and as such, we spend a significant amount of time and resources on this issue.
A panel with a catchy name, “OCR = Obsessive Compulsive Reporting?” discussed the ownership and control reporting rule (OCR), which requires clearing members to report all open positions to the CFTC, and the mechanics of the actual reporting process. Starting September 30, reporting parties are required to file the position reports electronically using the new format. As a technology partner, we are reviewing the template formats required by the CFTC and reaching out to our customers with the goal of identifying additional requirements for the TT platform to facilitate the new reporting rules.
Bitcoin and bitcoin derivatives were other hot topics. Every new derivative must get CFTC approval prior to the exchange listing. It was insightful to learn how the CFTC reviews all new products including bitcoin derivatives. According to the panel participants, bitcoin derivatives seem to fall in line with other derivatives, and so far the CFTC doesn’t have concerns about approving them.
But we still have to see how it develops. The first options on bitcoin products submitted by LedgerX exchange to the CFTC are yet to be approved.
At TT, we are always on the lookout for new markets and trading venues that might be of interest to our customers, and we are closely following all latest developments in the digital currency world.
Overall, I’m very glad I was able to attend. I made many new contacts and learned a lot of new things, and will plan to put this newly acquired knowledge into the TT platform to enable our customers to be (our legal counsel would not let me use this word, so I’m putting it in quotes) more “compliant.”