Wolters Kluwer Financial Services Releases 2015 Regulatory Trend Outlook for U.S. Securities Firms

20 January 2015

Expert Analysis Covers Volcker Rule, Capital Requirements and the Impact of the Republican-Controlled Congress

Securities compliance experts from Wolters Kluwer Financial Services have published commentary outlining key regulatory trends expected to impact U.S. securities firms in 2015. The outlook considers the regulatory landscape at a time four and a half years since the Dodd-Frank Act was passed into law. Given the context that only about half of the rules have been finalized and we are less than half way to implementation, trends indicate regulation will continue to increase over the coming year and in the near future.

Below is a summary of key trends covered:

  • Cybersecurity is at the top of everyone’s mind, which means an increased focus on technology at all firms.
  • Tier 1 financial holding companies are expected to have to comply with stricter capital requirements.
  • Regulators’ increasing use of discretionary tools means firms are likely to become much more familiar with stress testing, solvency testing and supervisory exams.
  • Most firms still do not have everything in place to comply with the Volcker Rule. More delays may tempt firms to reduce their sense of urgency, which may prove painful in the long run.
  • As the regulatory focus shifts, there will be more chances to propagate rules across jurisdictions and sectors as governing bodies interpret and implement the nuances that we have seen in the Foreign Account Tax Compliance Act, stress testing and liquidity and capital requirements.
  • The topic of Fiduciary Duty remains unresolved and unfinished, but a final decision is anticipated in 2015.
  • Since the passage of the Dodd-Frank Act, the Republicans have criticized it as being too costly and inefficient, even ineffective. Republicans now in control of the new Congress see this as an opportunity to reverse and/or modify some parts of the Act.

“It has been seven years since the beginning of the financial crisis, yet the full impact of regulatory change on the strategies, business models and operations of securities firms remains unclear,” said David Thetford, securities compliance principal analyst with Wolters Kluwer Financial Services. “While we still may not have a complete picture of the global regulatory response, firms that are prepared to anticipate and manage ongoing regulatory change will be better positioned to grow safely and profitably.”

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