1311-1165821_Slides for RCA_RegReporting_March

Information about 1311-1165821_Slides for RCA_RegReporting_March

Published on August 10, 2014

Author: Miles.Peterson

Source: authorstream.com


Navigating the new normal in regulatory reporting: Navigating the new normal in regulatory reporting 13 March 2014 Current regulatory reporting landscape Overview: Financial legislation around the globe continues to drastically change investment managers’ regulatory reporting obligations. Investment managers face multiple challenges in this environment, including: Geographically diverse regulatory reporting requirements Lack of identified role governing overall regulatory reporting Tight reporting deadlines Multiple reports with common data requirements, but slightly different formats Large volumes of data which are sometimes sourced from disparate systems and/or vendors The need to enhance data elements from outside sources to satisfy requirements Current regulatory reporting landscape Overview Current regulatory reporting landscape Reporting burden: Regulators, institutional investors and the industry overall are focusing on three types of reporting regimes covering both portfolio and systemic elements. Current regulatory reporting landscape Reporting burden Prior to 2010, asset managers typically filed few reports outside of the financial and investor reporting cycles. Historically, ad-hoc reports included items such as threshold reporting. In the current environment, asset managers are facing more than 60 report filings per year, depending on size and scope. Risk Form PF AIFM CPO-PQR/CTA-PR Solvency II Control Section 13/Threshold T ake over panel P rohibited industry Client attributes Tax (FATCA) TIC-S TIC-SLT No. of reports Current regulatory reporting landscape Data element overlap: The amount and frequency of information communicated to the regulators and other entities will continue to accelerate through 2018. Reporting requirements for each regulation and entity are not entirely unique. The chart to the right stratifies the required data points by reporting requirement and data category. Analyzing the chart, we see quickly that there are significant data commonalities across the various categories, which emphasize the need for a strategic approach. Current regulatory reporting landscape Data element overlap Elements of regulatory reporting Rules/procedures library: Elements of regulatory reporting Rules/procedures library Description Establish central regulatory rules and procedures library for compliance applications to existing inventory and future filing obligations, associated forms and triggers Rules/procedures library Key components Realized benefits Defines data elements that need to be reported, including overlap that exists across forms Houses a complete inventory of forms Elaborates the filing calendar and triggers for various filings Identify to whom information is reported Additional workflow to review rule changes and modify library accordingly Automates rule testing Increased efficiency by reducing manual intervention and leveraging common processes/applications Enhanced controls to mitigate risk Enables automated testing Consistent definition and application of data elements Dynamic environment to support addition of new regulations Elements of regulatory reporting Data acquisition layer: Elements of regulatory reporting Data acquisition layer Description Establish a formal data inventory and program of data governance for inbound and outbound data management Key components Realized benefits Aligns regulatory data governance policies and procedures to firm-wide data governance policies and procedures Identifies source and owner of data points currently used in regulatory reporting Identifies necessary data transformations based on reporting requirements Allows input of external data as needed Configurable to allow automated feeds for affiliates Tactical solutions can be set up in a short time frame to provide a bridge to strategic solutions, which may be longer term Elimination of manual data review/transformation Enhanced controls to mitigate risk Automated data gathering routines enable consistency and repeatability across forms Dynamic environment where users can be trained to create their own data acquisition routines Data acquisition layer ( auditable) Maturity scale Tactical Strategic Transform data Elements of regulatory reporting Validation, generation and approval: Elements of regulatory reporting Validation, generation and approval Description Establish repeatable, auditable validation, generation and approval process for regulatory reporting to ensure consistency across current and prior filings Key components Realized benefits Illustrates data lineage, including source system and any transformations performed Provides interactive environment for the user to validate reporting data Identifies sourcing dependencies Populates forms in an automated fashion Electronic approval process logs and archives sign-offs Establishes audit trails from data source to filing Increased efficiency through automation of previously manual processes Enhanced controls to mitigate risk Increased accuracy by facilitating efficient review and approval of data elements Full audit trail to support inquiries Interface focuses the user’s time on analysis rather than acquisition of data Validate Form Data - XML Report generation Approval process Approaches to regulatory reporting Key elements of a strategic solution: A strategic solution to regulatory reporting allows for more efficient and consistent production of reports by leveraging automation and optimizing workflow. A strategic solution should consider the following elements: Sits on the top of the various data sources to organize and orchestrate the reporting process Flexible and adaptable to changes in underlying data elements and additional reporting requirements as they are finalized Maps relevant reports back to the optimal data source Implements consistent business logic and/or calculation procedures Maintains data lineage for governance and audit purposes Produces verification reports to expedite reviews of the data Reconciles processes to various control reports Includes procedures and controls to ensure repeatable processes Approaches to regulatory reporting Key elements of a strategic solution Lessons learned: Based on our experience with implementing regulatory change across the operating model, the following items need to be considered: Regulatory expectations Testing Vendor management Implementation Data Organizational alignment Lessons learned PowerPoint Presentation: EY | Assurance | Tax | Transactions | Advisory About EY EY is a global leader in assurance, tax, transaction and advisory services. The insights and quality services we deliver help build trust and confidence in the capital markets and in economies the world over. We develop outstanding leaders who team to deliver on our promises to all of our stakeholders. In so doing, we play a critical role in building a better working world for our people, for our clients and for our communities. EY refers to the global organization, and may refer to one or more, of the member firms of Ernst & Young Global Limited, each of which is a separate legal entity . Ernst & Young Global Limited, a UK company limited by guarantee, does not provide services to clients. For more information about our organization, please visit ey.com. Ernst & Young LLP is a client-serving member firm of Ernst & Young Global Limited operating in the US. © 2013 Ernst & Young LLP. All Rights Reserved. BSC No. 1311-1165821 www.ey.com

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