What if Hyper-activity by Regulators is the New Compliance Normal?

1. REGULATORS HAVE BEEN HYPERACTIVE: WILL THIS PATTERN CONTINUE? The New Compliance Normal At the onset of the global pandemic, regulators exhibited all sorts of atypical activities. They relaxed regulations and offered temporary relief from injunctions. Market abuse investigations were put on hold and a flurry of the communique was issued that encouraged brokers to uphold a high ethical standard as the world, seemingly overnight, stopped. Notable Activities by Regulators The Federal Deposit Insurance Corporation (FDIC) issued several interim rules related to the capital effects of the COVID-response and, specifically, the Payment Protection Program (PPP) lending facility. At least nine guidance updates have been published since March. These include interim rules, revised rules, clarifications, addenda, and updated transition policies. This is an exceptional amount of activity for this or any Regulatory compliance agency. Concurrently, over the same short time period, the Financial Industry Regulatory Authority (FINRA) released dozens of regulatory and technical notices, proposed rule changes, interpretive letters, and other policy amendments. Responses by firms – Regulatory Compliance It didn’t take long. After not much more than a week of witnessing controlled to total chaos and everything in between, firms began bombarding their employees regarding ethical conduct. And they issued an insane number of emails to their constituents promising to keep workers and clients’ assets safe during these “troubled times” a phrase used repeatedly throughout March. Regulators globally recognize that trading compliance has shifted as a result of the virus. And they collectively acknowledge that the “how” has changed but not the “what”; firms still need to comply with MAR & all other regulations. Known Challenges haven’t gone away Organizations must not relax when it comes to building a culture of compliance. The legal and ethical obligation to follow regulations and adhere to societal behavior norms is not going away, pandemic, or otherwise. Verint advises its clients to remind employees that, “supervision, surveillance, archiving and enforcement of policies will continue in order to retain customer and transaction records, ensure data privacy, and maintain transparency and accountability around trading activities – no matter the circumstances.” Succinctly stated, every firm needs to be able to activate new compliance policies and deactivate outdated ones with the flick of a switch. And that’s going to take sophisticated technology that exists only in a handful of RegTech companies. Source: https://www.shieldfc.com/