banking / WHITE PAPER
SEC derivatives regulation: Turning compliance into opportunity
In October 2020, the SEC enhanced the regulatory framework for derivatives use by firms with increased focus on investor protection, product innovation, and risks related with complex portfolios. This has led firms to implement a comprehensive derivatives risk management program (DRMP) to ensure compliance.
To ensure timely compliance towards SEC derivatives regulation, firms will need to adopt a step-by-step approach:
Conduct preliminary exposure analysis
Identify DRM and initiate DRMP
Perform detailed impact assessment
Develop firm-wide business strategy
Define target operations and roadmap
Firms must proactively identify and engage with the right partners to ensure the implementation of an efficient and cost-effective solution before the August 2022 compliance deadline. This white paper discusses the implications of this rule for asset management firms and custodians as well as the changes required to business capability and regulatory reporting processes.