OPS 2016: How Participants Are Solving Problems, Transforming the Industry into the New Reality

Leaders in Financial Services operations and technology gathered on May 2-5, 2016, at the 43rd annual SIFMA Operations Conference & Exhibition to address industry challenges and share perspectives and strategies. SIFMA’s Executive Vice President, Business Policies and Practices, Randy Snook, opened the conference by reflecting on the dynamic changes that are transforming the securities industry, “We are in the midst of several seismic shifts fundamentally changing financial services.” Among the changes, three issues dominated discussions:

The Move to the T+2 Settlement Cycle – With detailed resources available, including the T+2 Industry Implementation Playbook, experts generally believe that the transition to the shorter settlement cycle should proceed smoothly. However, for those firms not yet mobilized, the message was clear: work must start today. Coordination and collaboration among firms and agencies is the key to success.

Consolidated Audit Trail – The SEC recently published the NMS Plan for comment and at OPS 2016, the SEC’s Stephen Luparello stated that the commission is committed to implementing the plan and reducing costs, while addressing privacy concerns and the need to protect PII. As the CAT moves forward, discussions focused on the aggressive timeline, the need to retire redundant systems such as OATS, and what the scope of the CAT will be down the road. During The Regulatory Landscape panel, FINRA’s Chief Legal Officer, Robert Colby, confirmed that fixed income will be rolled into the CAT.

Regulatory Changes and Impact – Among the biggest challenges identified at the conference for the year ahead is the uncleared margin rules, which will begin phasing in later this year in 2016 and apply to everyone in 2020. This will be a particular challenge for the buy-side as they will be required to manage collateral for the first time.

Other topics that discussions focused on included blockchain technology and its role in financial services, DOL Fiduciary and subsequent program changes, cybersecurity, and operational risk.

Thomas Price is Managing Director, Operations Technology and BCP at SIFMA.