Financial services groups inundated with new rules

A new study by the TCG, Risk and Compliance unit has found that financial services firms around the world deal with around 60 regulatory changes every day.

A new study has found that financial services firms around the world are dealing with an average of 60 regulatory changes every working day which surmounts to a 16 percent increase over the last year.

Since November 2010 there have been 14,215 changes announced from regulators worldwide, resulting in an increase of 2036 from the same period a year earlier.  This information has been brought to light by new research by the Thomson Reuters “Governance, Risk and Compliance unit” (GRC).

The new study tracks everything that compliance officers are expected to be up to date with, including the passage of new laws and short-selling bans, the issuance of consultation papers and speeches that contain policy announcements.

Since the emergence of the financial crisis in 2008 regulatory announcements have been increasing year on year by 16 to 20 percent, and they are likely to continue growing in this trend until at least 2013 according to David Craig, president of the GRC unit. He commented, “We are reaching a point of regulatory fatigue but we have a couple more years to go.”

More than half the regulatory activity of the past two years has come from the US and Canada, whilst UK and European regulators have accounted for 22 percent of regulatory activity; Asia made up 15 percent.

Financial services firms are becoming hesitant to commit to new business whilst the regulatory environment remains disconcerted which seems to be acting as a hindrance on the worldwide economy.  Mr Craig has stated, “There is the cost of dealing with it and adapting to the new [rules] but also the economic cost of all the uncertainty.

The regulatory burden is slowing banks down from doing some of the things they need to do to get the economy moving.”

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