AxiomSL, a provider of risk and regulatory reporting solutions, has announced a solution to address the new EU requirements defined in the Investment Firms Regulation (IFR) and Investment Firms Directive (IFD), followed by the UK requirements from the Financial Conduct Authority (FCA) that have yet to be finalised.
The IFR/IFD solution will enable investment firms to tackle the significant shift in the current rules, including new category classifications, and to better manage the potential increase in regulatory capital requirements that most investment management firms will be subject to across jurisdictions.
The deadline for IFR/IFD will be June 26, 2021, however, investment firms in Europe have to prepare to implement the IFR’s complex new data collection, categorisation, capital calculation, and reporting requirements. In addition, many firms will need to be ready to react quickly once the UK specific regulations and reporting requirements are confirmed.
Edward Royan, Head of Global Products, AxiomSL, said: “There will be many challenges in complying with the IFR/IFD regimes since the implications of the new rules are complex and extensive. In our discussions with investment firms we have noted the expected impact on capital and liquidity requirements. The challenge here is to juggle between previous requirements still in place and the new requirements, in addition to dealing with one set of calculations for Europe and another set for the UK. Our data integrity and control platform will enable firms to seamlessly integrate source data across functional silos including – treasury, finance, risk, and others – with the proper controls to deliver accurate reporting and ensure that clients’ submissions satisfy regulators’ requirements and withstand scrutiny across jurisdictions.”
IFR will be initiated under a five-year transition period beginning in 2021 and it is expected that the regulator will provide ongoing updates to requirements, categorisations, and data needs over the transition period. As the regulation evolves, investments firms will need to monitor changes and adapt quickly particularly if their category classification changes. The use of Excel spreadsheets and manual processes will not suffice given the regulation’s complexities, expanded and granular requirements and tight timeline.
AxiomSL’s ControllerView transparent data integrity and control platform delivers a seamless solution for addressing current and evolving IFR requirements. For those subject to category changes based on the new and complex K-factor methodology, they are enabled to tackle IFR and/or the possibility of parallel Capital Requirements Regulation (CRR) reporting with consistency and transparency. The solution will populate and validate the reports to meet local authority/regulatory requirements for capital and liquidity reporting.
