TCS Capital Markets Forum | PJ Di Giammarino
centres and recovery time windows of two versus four hours. Moreover, distances between data centres and failover times will prove diffi cult, but equally important will be the ability to pull all this central information together and pump it out.
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Given the enormity of the task, it is important for fi rms to realise they can’t go it alone. They need to think about all their trade associations and pinpoint the ones that can solve specifi c problems. The industry can help you fi gure out the details and the impact, but ultimately alliances of suppliers should be formed to deliver what is needed. There should also be a joined up message in terms of the actual requirements, such as what is the defi nite standard, how is it going to be applied, what information trading counterparties should know and what information is being fed to both the market and the regulator. That will be the name of the game for the next 18-to-24-to-36 months. And throwing more people at these problems is not the solution. Calculations from Andrew Haldane (executive director for fi nancial stability at the Bank of England) based on a McKinsey study concluded that 350 fi rms,
Best Execution | Spring 2013 71
in Europe alone, would require 70,000 full time people to comply with Basel III in Europe. As a result, careful thought is needed on how
to approach EMIR, CRD IV, MiFID II or a MAD. Doing it in-house may lock up the entire bank and it could prove a fairly painful exercise. However, close attention should also be paid to the recent guidance issued by the Financial Services Authority in their ‘Dear CEO’ letter to asset managers. The main thrust was that many outsourcing companies continue to support multiple large international banking groups and may not be able to offer their services should they, or their parent companies become insolvent. In other words, if bank A or supplier B goes down on Monday, what do we do Tuesday morning? Many have not thought through the ramifi cations for their supply chain. Although there is uncertainty, there are a lot of
hard dates coming quickly and many of the things that need to be done are fairly foundational. They are not going to be easy, one-off projects but complex, multi-year programmes. It is important to develop a more fl exible approach and engage people in and outside of the fi rm to work together in fi nding the best solutions. ■
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