Brexit from data provider prospective Data requirements: from statistical reporting to MIFID product governance

Transcription

1 Brexit from data provider prospective Data requirements: from statistical reporting to MIFID product governance Karina Kuks Head of product development London 12. June 2018

2 Agenda Opening quote Regulatory Framework Repositioning to the German market: Role of WM Group Conclusion

3 Opening quote The planned EU withdrawal from UK poses a problem for banks located in London: they need subsidiaries located in EU to conduct services such as deposit and lending activities. The two-year deadline for negotiations between the British government and Brussels on the Brexit modalities runs until March 2019 (?). The Frankfurt financial centre also wants to benefit from the move of bankers from London to the main

4 Regulatory Framework Different perspectives on Brexits: UK Perspective : What impact would Brexit have on the way in which banks are regulated in the UK? Assumption: maintenance of the current regulatory structure and achievement of mutual recognition between the British and European regulatory authorities how much the BRRD, the BRA and the PRA Rulebook need to be amended to maintain equivalence? EU Perspective : OR Passport under the EU single market Directives? UK as a part of the European Economic Area (EEA) with granted access to the EU s single market subject to compliance with the relevant EU legislation Assess to the EU single market through bilateral treaties, without being a member of either the EU or EEA German Perspective : UK banks on the establishment of a branch or a subsidiary in Germany in preparation for a potential Brexit Implications : Compliance with BaFin s rules and procedures

5 Repositioning to the German market German Banks with vast presence in UK are moving their businesses bank to Frankfurt: Due to the Brexit, Deutsche Bank will transfer all of its approximately 20,000 institutional clients from the securities trading business, which were previously booked in London, to Frankfurt in their computer systems. International Banks with vast presence in UK are considering to establishing their presence in Frankfurt: According to EZB announcement banks are interested in relocation of the business activities to Frankfurt... about 20 banks have applied for a full bank license in Germany... the application process for the banking license in Germany is almost overdue Japanese investment bank Nomura said today it had been granted a licence by German regulators for its new post-brexit Frankfurt base (June, 1 st 2018)

6 Repositioning to the German market Local regulatory framework General possibilities to conduct banking business in Germany: Goal : Separate legal entity (subsidiary) Pre - Brexit : Branch of / cross-border services by EU bank pursuant to 53b KWG deemed to be a dependent branch subject to reduced regulatory requirements Post - Brexit : Branch pursuant to 53 KWG deemed to be a separate credit institution subject to equivalent prudential requirements Applicable regulatory requirements : bank-specific organizational requirements laid down 25a and 26b KWG (MaRisk): Risk Management, Compliance, Outsourcing National SREP: ICLAAP Compliance according to WpHG Securities prospectus law Large exposure regime: treatment of cross border intra group exposures New capital requirements Recovery Planning / German Bank Separation Act

7 Repositioning to the German market Role of WM Group (1/5) INFORMATION What does WM Group stands for? DATA WM KNOWLEDGE What is the role of WM Group in Post - Brexit environment? Provide standard data solutions to fulfill regulatory requirements Customize the standard data solutions to meet the specific needs An extract from WM Initiatives MiR II MiFID Reference II EDH/HSL KID für PRIIP Services LCR LCR Classifications CIS Cashflow Identification Service/IFRS9 RGW Risk Weight acc. CRR IST International and Special Tax

8 Repositioning to the German market Role of WM Group (2/5) MIFIR / MIFID II What does WM Group stands for? CRD IV / CRR RISK MANAGEMENT WM COMPLIANCE TRADING/ CLEARING/ SETTLEMENT ISSUARANCE PROCESSING EMIR WP CUSTODY

9 Repositioning to the German market Role of WM Group (3/5) COMPLIANCE RISK MANAGEMENT MIFIR / MIFID II WM ISSUARANCE CRD IV / CRR TRADING/ CLEARING/ SETTLEMENT 1. NACE Code 2. Own funds deduction for UCITs 3. CVA-Risk 4. Own funds classification 5. Capital exposure classifications 6. Capital Risk weighting 7. LCR liquidity classification PROCESSING EMIR WP CUSTODY

10 Repositioning to the German market Role of WM Group (4/5) COMPLIANCE MIFIR / MIFID II CRD IV / CRR 1. Target Market 2. Complexity classification 3. Classification of trading venues 4. Exclusion/suspension of trading 5. Tick size WM RISK MANAGEMENT TRADING/ CLEARING/ SETTLEMENT ISSUARANCE PROCESSING WP CUSTODY EMIR 1. LEI: Local operating unit (LOU) 2. LEI verification interface

11 Repositioning to the German market Role of WM Group (5/5) 1. Group structure 2. Bail in classification 3. Bail in service 4. Sanctions 5. Data quality COMPLIANCE MIFIR / MIFID II WM CRD IV / CRR 1. Reference data 2. Life cycle data 3. Place of custody 4. T2S RISK MANAGEMENT PROCESSING ISSUARANCE TRADING/ CLEARING/ SETTLEMENT EMIR WP CUSTODY Ad-hoc selections

12 Conclusion Our focus: 2018 and beyond Interaction & Digitalization of data (Front-, Back-, Middle Office, Risk Controlling, Finance) Modernization of data flows Customization of clients data Regulatory compliance Consistent Reporting 12

13 Conclusion WM Group supports the navigation in the post-brexit environment 13

14 Contact Thank you for your attention! Karina Kuks Leiterin Produktentwicklung Telefon +49 (0) Mobil +49 (0) Internet WM Datenservice Produktentwicklung Düsseldorfer Straße Frankfurt 15