SIFMA - Securities Industry and Financial Markets Association Inc.
09/17/2024 | Press release | Distributed by Public on 09/17/2024 09:46
Remarks as Prepared for SIFMA's 2024 Operations Conference & Exhibition - Tuesday
Remarks by Joseph Seidel, Chief Operating Officer for SIFMA, as prepared for delivery at SIFMA's Operations Conference & Exhibition.
Good morning and welcome to day two of SIFMA's Operations Conference and Exhibition. Before we begin, I would like to thank our sponsors as well as our exhibitors. I encourage you to visit them in the exhibit hall. On behalf of SIFMA I also extend my thanks to our speakers, and of course to all the attendees. We appreciate the support and participation of everyone in this room.
The past few years for our industry have been marked by change. The move to T+1 was monumental, and I echo the comments made by Ken Bentsen, SIFMA's CEO, yesterday on the incredible level of coordination within the industry which led to a seamless transition to T+1 in May. Regulatory changes continue to alter the landscape of our industry, as we assess the onslaught of new proposals that have come out over the past few years and prepare for the compliance dates of newly finalized rules. As operations professionals, you are on the front lines and know all too well the heavy lift required when regulations change.
The SEC's Treasury clearing rule is another example of landmark regulatory changes where operational complexities pose a severe challenge for the industry -and the clock is ticking, with cash clearing required to go into effect by the end of 2025 and repo clearing by June 30, 2026. Much like T+1, the SIFMA Operations & Tech team is working with our members to develop an industry roadmap describing the functional changes that firms may need to consider and implement in preparation for the compliance dates. In addition, and on a parallel track, our Capital Markets and Asset Management Groups are working on standard documentation for the industry to use, which we will discuss tomorrow and should be released soon. This is an all hands-on deck effort here at SIFMA and a top priority. We will host both a breakout session panel today and a general session discussion tomorrow on the new clearing mandates and I encourage you to stay involved with us on this issue.
Further looking at new challenges, SIFMA has also been very focused on the Basel 3 endgame and the GSIB surcharge proposals, and we commend the agencies for recognizing the need for both broad and material revisions and further public comment and analysis. The Basel 3 proposal is one of the most complex regulations that will ever be implemented & will touch virtually every function of financial holding companies with a profound impact on the US economy. We will continue to stress to the prudential regulators that those rules must be implemented in a way that does not overly penalize banks' capital markets activities, which in turn would negatively impact liquidity in corporate and funding markets, hurting growth in the real economy.
It appears we are making progress on this front, and a speech last week by Federal Reserve Vice-Chair Barr outlines a series of potentially constructive revisions to the Basel proposal, several of which appear to address SIFMA priorities. A study done by PwC last June found that the original proposal would cause U.S. economic growth to decline by up to 56 basis points-which equates to a reduction in growth of up to 25% based on the U.S. compound annual growth rate over the past 10 years. The negative impacts from this decline in economic growth would likely materialize as reduced lending by banking institutions and as increased costs to consumers and businesses. It was those end users who comprised a significant slice of the unprecedented volume of comments raised on the original proposal and who will be most impacted by any final rule. As we evaluate the re-proposal - which could come out as early as this week - we will look to see whether this negative impact on the end-user community has been significantly reduced and whether the re-proposal better recognizes the critical role of our capital markets, the deepest, most liquid and efficient in the world, as a core component supporting the broader U.S. economy.
These are some of the major issues and priorities SIFMA is currently working on with the Operations community and we very much look forward to tackling these problems with the people here in this room. Looking ahead then at today's program, some of the highlights of your day include a discussion with regulators on priorities and initiatives through the rest of this year and into 2025. John Dalton from Fidelity will discuss AI-powered end user applications and the impact on the investing world; BetaNXT's Don Henderson will look into the future of connected data; and FIS's Matt Stauffer will cover the convergence of the buy and sell sides and where that is headed going forward. Breakout sessions today will cover Treasury clearing, corporate actions, modernizing transfers of assets, and what firms should be doing now with regard to the DOL's fiduciary rule. It is another day of engaging discussions on the sea changes we are seeing in the operations space. All that, plus Phil Simms and a moment to recognize a SIFMA Hall of Famer who will be retiring this year. It is going to be a great day.
Turning to our first keynote speaker of the day: Change, of course, is a constant in our business. AI has steadily evolved from an emerging technology to a part of our daily lives, and yet we are only on the cusp of realizing all that it can do. Digital assets are gaining momentum as well, as firms continue to build on the potential offered by distributed ledger technology. Here to talk about these and other factors which comprise the broader theme of change in the operations space is Ioana Niculcea from Citi.
Ioana leads Partnerships for Citi Digital Assets, driving Citi's digital client engagement approach and working to operationalize such opportunities via partnerships and solution co-development with investor and corporates clients, as well as digital innovators. Prior to this role Ioana built and led the Fintech and Digital practice within Citi Markets Business Advisory Services team, a strategy consultancy team advising the C-suite of Citi Markets institutional investment manager clients.
In her pre-Citi career, Ioana developed strategic partnerships and investments with FinTech companies at JPMorgan. She also worked in strategy consulting for Monitor Deloitte and in macroeconomics at the International Monetary Fund. Ioana holds a BA in Economics from the University of Virginia and an MBA from Harvard Business School. Please join me in welcoming her to the stage.