Despite geo-political turmoil and regulatory agendas moving at different speeds, harmony for regulations governing derivatives treading is a realistic goal for the industry, says Ryan Taylor, global head of derivatives reform and Volcker compliance, RBC Capital Markets.
“But is it probable?” asks Taylor who spoke to FTF News during the DerivOps North America conference in Chicago last month. He was a participant in the “Riding Global Waves of Regulation” session.
Regulatory harmonization is not a given even though the CFTC and E.U. regulatory officials have been more conciliatory toward industry participants and each other’s respective regimes.
“Without harmonization, it could be difficult,” Taylor says. “It could create regulatory arbitrage in the derivatives market. I think if the U.S. unilaterally re-evaluates these rules and other jurisdictions don’t reevaluate these rules it will be challenging for harmonization to occur.”
If harmonization can be achieved globally, it will help banks and other market participants to reduce costs via standardization, Taylor says. This could mean a lower price-tag for IT infrastructures and more capabilities to scale operations, he adds.
CREDITS:
Video Production: Janene Knox and William J. Poznanski, Jr.
Interview conducted by: Eugene Grygo, chief content officer, FTF News
Co-Producers: Sarah Hathaway, vice president, Financial Technologies Forum (FTF) and Eugene Grygo
