The financial marketplace has always been an extremely dynamic world, with increased intersection of finance and technology, the pace of change has been hectic in last few years. With these changes comes changes in participation of retailers in the ecosystem which is growing at a phenomenal rate. This warrants regulatory changes also maintaining the same momentum. Regulators are constantly working in overdrive to ensure that the markets remain just and fair, the retail investors are well protected.
India is now a world leader in adopting and setting new standards in financial markets, examples being while the world is settling down on T+2 settlement cycle, we have already comfortably moved into T+1 regime. The integration of payment, securities movements and execution platforms have created global benchmarking platforms in India. Equally crucial for the financial ecosystem are the safeguards around data governance and protection, cloud storage and system reliability. As such these also need additional regulatory checks and balances being in place.
While these regulatory changes bring lot of safety nets for the end users, For technology providers like Rupeeseed, it brings in its own set of challenges. Apart from the regulator there are multiple MII (Market Infrastructure Intermediaries) with whom the technology platform of Rupeeseed is tightly integrated. Right from basic standardization of processes driven by new regulations to the timelines and interpretations of regulations vary from minute to major differences between MIIs. This poses challenges at the time of meeting the compliance requirements due to the nature of ambiguity and competing priorities amongst multiple regulatory asks.
Essentially there are 3 pillars around which Rupeeseed revolves to ensure that it is not only meeting compliance requirements but also eases the burden of its clients in meeting regulatory asks.
1) Establish and Implement Frameworks: Compliance and Regulatory framework is embedded in the operating model of Rupeeseed whereby there is a combination of human and reg tech which streamlines the compliance processes. It also ensures that there is regular compliance monitoring and reporting structure in place. This largely mitigates the risk of non-compliance. Also it helps build operational resilience in light of multiple regulatory changes happening simultaneously.
2) Collaboration and Education: Rupeeseed closely engages with the front line regulators and is an active participant in industry forums. These proactive engagement enables Rupeeseed to anticipate regulatory changes and adapt our strategies and technologies accordingly. It also fosters the environment of active dialogue on contentious issues before the regulations are framed reducing the risk of operational challenges being discovered late in the process. After the finalization of regulatory asks, the solutions and approach devised is
communicated to the relevant stakeholders. Necessary walkthroughs and trainings are conducted to ensure there are no gaps understanding the solutions provided to meet the regulatory obligations by the clients.
3) Execution: Post adaptation and education continuous monitoring mechanisms are put in place to ensure that there are little deviations. Given that Rupeeseed is one of the very few companies encompassing all stages of lifecycle of trading journey of an individual, it is able to assimilate the changes with a 360 degree view and not in silos of execution, back office etc. This gives a great advantage to Rupeeseed to embrace the regulatory impact in toto and is extremely beneficial to its clients.
To conclude, the regulations are coming at frenetic pace and evolving almost at the same pace as the business dynamics in financial markets. Technology platform providers like Rupeeseed play a pivotal role in ensuring that the regulatory requirements are complied with at ease. It also helps to ensure that the entire ecosystem is equipped with right tools to be operationally resilient without forgoing the innovation. This would go a long way in driving sustainable innovation led growth in the financial markets. The author is COO of Rupeeseed.
