SIFMA - Securities Industry and Financial Markets Association Inc.

09/16/2024 | Press release | Distributed by Public on 09/16/2024 10:40

Opening Remarks as Prepared for SIFMA's 2024 Operations Conference & Exhibition - Monday

Remarks by Ken Bentsen, President and CEO for SIFMA, as prepared for delivery at SIFMA's Operations Conference & Exhibition.

Good morning. It is my pleasure to welcome you all to SIFMA's 51st Operations Conference and Exhibition.

Before we begin today, I would like to thank our sponsors and exhibitors for their support of SIFMA. Please take some time to visit the exhibit hall over the next few days during the breaks and receptions to meet and learn about these firms who provide critical services to our industry. Thanks also to our speakers, without whom we could not provide such relevant and useful programming.

I would also like to recognize the members of SIFMA's Operations and Technology Committee for their engagement and support in developing the content for this event, not to mention their work throughout the year on behalf of the industry. In particular, I would call out the leadership of the Committee: chair Debra Guarino from BNY Pershing and co-chair Erin McCourt from Morgan Stanley, along with SIFMA Board member Claire Santaniello from BNY Mellon, who is chair of the Operations and Technology Board Subcommittee.

And of course, I want to express my thanks to my SIFMA colleagues who have worked to make this conference a success, particularly those on our operations and technology team. As many of you know, our long time Operations head Tom Price is retiring later this fall after 24 years at SIFMA and its predecessor SIA. Tom and the team he has led have made countless contributions to our work in the operations space in those two plus decades, and in that time has kept us on the leading edge through a multitude of changes in an area that moves fast. Whether leveraging new technologies to achieve greater efficiencies, staying several steps ahead of increasingly sophisticated cyber criminals, or planning for the worst-case disaster scenarios, Tom has seen us through it all. We are deeply grateful for his dedication, hard work, and leadership.

We are very fortunate to welcome Steve Byron as the new head of the team, joining us earlier this month from Goldman Sachs, where he served as vice president and operations senior leader of equities post-trade transformation and strategy. His extensive financial markets operations experience will be a tremendous benefit in this role, and we are pleased to have him join the team.

I hope you will all find an opportunity to both wish Tom well and to meet Steve over the next few days.

I want to take a moment to recognize the incredible effort and commitment of our operations and technology team. Their ability to maintain momentum and deliver exceptional results, even during such a demanding year, speaks volumes about their dedication and teamwork. Charles DeSimone took the reins as deputy head of the team after the T+1 conversion, and we benefit from his strong industry and operations knowledge and his commitment to providing value across broad member segments through effective technology and operations practice.

The whole team deserves a heartfelt shoutout for its work on the T+1 transition. I would be remiss if I did not specifically call out Anthony Machiarullo, who along with Tom led SIFMA's work on this issue and somehow stayed awake for 96 hours over Memorial Day weekend manning the SIFMA T+1 Command Center. Tom Wagner who manages our BCP, incident response, and Cyber resiliency efforts; Betsey Gilligan who works with Tom on cyber and BCP and leads on many other operations workstreams; and Jenn Dominguez who, along with Kathy Fuentes, managed Tom, keeps the trains running on time and is a key figure in the success of this conference. But I want to be clear-the whole Ops team regularly demonstrates not only individual excellence but a collective spirit of collaboration and member service.

I would also thank our conferences and communications and marketing teams, led by Sal Chiarelli and Cheryl Crispen, respectively, for their hard work on this conference.

T+1 notwithstanding it seems that the work of the operations professionals is never done. We are leading efforts to further develop digitization of securities on blockchain platforms, preparing for revamp of securities lending infrastructure and of course getting ready for the implementation of Treasury securities and repo clearing (more to come on that later in the conference). That is just to name a few workstreams, and of course, doesn't count pending rulemakings that will need to be implemented and the perennial, but critical resiliency work involving cyber, Reg SCI testing, business continuity, and incident response.

When we last held this event - in May 2023 - our main theme was the acceleration of the settlement cycle. One year later, after an extraordinary industry-wide preparedness effort, we started operating in a T+1 world and the transition was seamless. I applaud all of you for your coordination and hard work on that monumental effort. This multi-year undertaking was extremely complex with little or no room for error. Notwithstanding months of prework before official regulatory action, and an accelerated implementation schedule, the industry, collectively, pulled it off splendidly. SIFMA and our industry partners DTCC and ICI recently released our T+1 After Action Report and I commend it to you as a detailed analysis of the transition, the benefits to market efficiency, and importantly a discussion of why we believe moving to T+0 is not advisable at this time.

This year, one of the themes running through our conference programming is artificial intelligence. The use of AI in the financial services industry is not new-AI and related technologies have been used by market participants for many years to improve efficiency and accuracy in a variety of tasks. But advancements in AI, particularly in generative AI, have heightened interest and concerns about the use of such technology in the financial services industry. With more widespread use, there has been an increased focus on AI by policymakers and regulators. In fact, the Biden Administration has undertaken a "whole of government" review of AI and its impact. Last week, SIFMA released a white paper at the direction of our board outlining our views on AI and the financial sector. As detailed in our paper, SIFMA believes policymakers should move carefully. For the financial sector, the existing legal and regulatory frameworks are sufficiently flexible to cover the use of AI, and future regulatory action should only be considered if novel risks are identified that these frameworks do not address. We support a risk-based and technology-agnostic approach for any regulation in the financial services industry. You can find that whitepaper, and much more on many of the topics we'll cover this week, on our website.

Finally, let me thank you for taking the time from your busy schedule to attend and make this event a success.

It is now my great pleasure to introduce our first keynote speaker, KPMG Chief Economist Diane Swonk. Diane is one of the most respected economists in the world, who maintains a unique perspective on the inner workings of Main Street as well as Wall Street. She is an expert on the economics of the labor market, monetary policy, and structural changes that are distinct from economic cycles.

Diane began her career with money-center bank First Chicago, then spent more than a decade as Senior Managing Director and Chief Economist at the financial services firm, Mesirow Financial. Before joining KPMG, Diane had her own economics consulting firm and worked at Grant Thornton.

She has served as an advisor to the National Economic Council on a nonpartisan basis and regularly briefs the regional Federal Reserve banks and the Board of Governors in Washington, DC. She has provided Congressional testimony on income inequality and how to preserve and bolster the quality of government economic statistics. She is on the Advisory Board for the Bureau of Economic Analysis, of the Census Department.

We are very pleased to have Diane with us today to discuss the challenges faced by the Federal Reserve as it tries to balance its dual mandate of price stability and maximum employment. Please join me in welcoming to the stage Diane Swonk.

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