Regulation has dominated the financial services landscape since the banking crisis and its grip on the sector continues to tighten. The compliance teams of investment banks are managing a barrage of regulation aimed at preventing market abuse and strengthening confidence in the trading environment.
Retail banking is a rapidly changing industry from a compliance point of view. Banks have grown and restructured their compliance divisions in response to the Financial Services Authority’s regulatory initiatives. Meanwhile, they are preparing for the FSA to split into two organisations this year – the Prudential Regulation Authority and the Financial Conduct Authority. Going forward, banks will have to report to the two separate entities (meaning different reporting skills will be required) and they are expecting these regulators to take a more intrusive approach than that used by the FSA.
The UK investment management sector is in relatively robust shape despite the challenging economic climate. Nevertheless, it still needs to navigate an increasingly sophisticated regulatory landscape that is marked by a number of European directives relating to portfolio management including the Markets in Financial Instruments Directive (MiFID), the Undertakings for Collective Investment in Transferable Securities (UCITS) directive and the Alternative Investment Fund Managers Directive (AIFMD).