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Achieving Compliance with the New SEC Derivatives Regulation for Funds

 

Ravishankar Poonjolai

Consulting Partner, Capital Markets Advisory Group, BFSI, TCS

Nishant Kumar

Solutions Advisor, BFSI, TCS

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.

 

About the author

Ravishankar Poonjolai
Ravishankar Poonjolai is a Consulting Partner with the Industry Advisory Group within the Banking and Financial Services (BFS) business unit at Tata Consultancy Services (TCS).
Nishant Kumar
Nishant Kumar is a Domain Consultant in the Risk Management group within the Banking and Financial Services (BFS) business unit at Tata Consultancy Services (TCS).