LONDON, July 5 (IFR) - Five large banks have signed up to the Droit regulatory compliance platform for derivatives and securities trading as they prepare for sweeping MiFID II reforms that take effect in January.
BNP Paribas, Credit Agricole, Goldman Sachs, Lloyds and UBS have committed to using the ADEPT platform from Droit Financial Technologies for compliance with the new rules that include pre-trade transparency, best execution requirements and transaction reporting for an expanded range of exchange-traded and over-the-counter instruments.
Against a backdrop of sweeping post-crisis reforms, including Dodd-Frank in the US, the European Market Infrastructure Regulation and MiFID II, counterparties are subject to a complex array of trading, clearing and reporting requirements that differ across jurisdictions.
“Knowing who you can trade with, what you can trade and where you can trade is considerably more involved than even five years ago," said Satya Pemmaraju, founding partner and CEO of Droit. "These real-time, point-of-inquiry demands provide further challenges for a strategic infrastructure."
MiFID II is the latest addition to the ADEPT platform, which has already incorporated more than 12 global regulatory regimes. The service offers real-time regulatory decision-making, ensuring that every transaction is executed within jurisdictional guidelines and on a timely basis, with accurate pre and post-trade obligations.
Founded in 2012 by a team of derivatives traders, quants and technology specialists, Droit focuses on automation of global regulations and market micro-structure to create platforms that merge finance and computational law.
Samy Beji, global head of structuring and deputy sponsor of the MiFID II programme for Credit Agricole CIB, said the platform will play a crucial role for the bank as it completes its MiFID II compliance transformation.
“The complete digitalisation of capital markets pre and post-trade processes is a considerable challenge for investment banks, as it requires a deep understanding of the regulatory texts and mastering the use of data, products and cutting-edge technologies," said Beji.
Goldman Sachs has worked closely with Droit since late 2016 when it led a US$16m investment in the company with Wells Fargo, Pivot Investment Partners and principal trading firm DRW.
"Droit is a central part of our eligibility architecture as we prepare for MiFID II," said Jo Hannaford, managing director in Goldman Sachs' technology division. "We continue to enjoy a strong and collaborative working relationship with the company." (Reporting by Helen Bartholomew)