After the successful completion of assessments of technology providers in September 2016, a core group of banks have now committed, through Project Sentinel, to the implementation of the solution that has been designed over the last 9 months. Sentinel went through an accelerated cycle of requirement gathering, extensive RFI process to select the appropriate technology, material proof of concept of the key functionality, and in December the consortium moved into the implementation of the full solution. This includes the delivery of technology and workflows utilising agreed standards for the Sentinel components thereby allowing integration and interoperability with banks’ existing diverse and complex technology platforms in order to ensure compliance with MiFID II regulation.
The initiative to mutualise the cost of MiFID II implementation in the OTC front office is now well advanced with its plans to create by end of September 2017 a best-of-breed technology solution in collaboration with its short-listed vendors. After an in-depth selection process, the three chosen technology providers, Google, Adaptive and AppsBroker, have started to build the solution which will achieve compliance for MiFID, while also offering flexibility for the member banks as new regulation takes shape in the coming years. The solution will run in the cloud and deployed as a SaaS, leveraging Google Cloud Platform services. The solutions are being delivered to participating institutions iteratively over the coming months. Institutions have been able to start as early as February 2017 on the integration of Sentinel components with their internal systems. Monthly releases will follow until the compliant version at the end of Q3 2017.
Tariq Shaukat, President, Google Cloud stated: “The Financial Services industry is constantly facing new regulatory challenges that put pressure on individual organisation’s internal resources and systems. The Sentinel initiative will help these institutions to comply with the latest MiFID regulation by utilising secure, advanced technologies.”
Sentinel will provide a componentized MiFID Front Office solution based on a normalized regulatory data model, Sales-Trader Workflow, Regulatory Rules Engine and Reporting Engine. The focus on open standards and open infrastructure for interoperability allows Sentinel members to choose the specific components they wish to implement out of the suite of 13 front office and reporting components that Sentinel is creating, thereby maximising the benefit from the Sentinel mutualised approach.
Grant Wilson , Managing Partner, Etrading Software commented: “The work being done by this diverse group of banks, vendors and the ETS team is a testimony to the benefits of collaboration in mutualising costs and lowering regulatory uncertainty. Having a mutualised approach across firms who govern the process, development and own the final outputs allows these firms the flexibility to not only meet the needs of MiFID but also continue to develop the model together as the regulatory landscape grows and changes without incurring significant costs from incumbent vendors.”
Sentinel delivers on 4 key principles for the consortium:
- Mutualised cost of compliance and consistent interpretation of incoming regulation
- Future proof technology including flexibility through an open architecture
- Articulation of a clear plan for delivery of compliance to MiFID to regulatory bodies
- Total consortium ownership of 100% of the IP.
John Marks, co-founder and director, Adaptive, commented: “The Sentinel project takes a disruptive approach to solving MiFID II. Adaptive’s strong capital markets business and regulatory knowledge, combined with our track-record in delivering real-time workflow systems to the cloud, will result in a best-in-class platform which is open and extensible. This represents a significant step towards the digital transformation of the voice-traded, OTC market; thereby turning a regulatory burden into a competitive advantage.”
Mike Conner, Founder & CEO of Appsbroker, commented, “We’re delighted to be working with the Sentinel consortium to unlock the power of the Google Cloud Platform and Appsflow to achieve MiFID II Compliance.”