How can I help?
Authorisation
The old days when financial markets were largely unregulated are long gone. If you want to become active on the financial markets, for example as a broker, as a trader or as a trading platform, you will most likely need a license. And soon most firms active in the so-far unregulated crypto space will be under the supervision of AFM and DNB. I have been at both sides of the table – so I know what the regulators are looking for when assessing a new license application for your firm and what the AFM and DNB expect from you as a director or board member.
Regulatory Dialogue
The regulators, like AFM and DNB in the Netherlands, try to make sure that markets are fair and efficient and that market participants play by the rules. And when necessary, they wille enforce these rules and regulations. But that is not is not all they do. When you have valid questions, or when you want to discuss an alternative approach to comply with the regulations because you have a revolutionary new business model, you are generally welcome to discuss your views with them. And when you have good arguments, they will listen and try to find a solution with you. Believe me, I have been at both sides of the table for more than 20 years
Regulatory Change
The financial markets are undergoing radical changes, from technological evolution (algorithmic trading) to new products (crypto, tokenization) that did not exist at all 10 or 20 years ago. And also changes in society (climate change, European integration) are changing the expectations on financial market participants. The result is an almost constant stream of new rules and regulations for the financial sector. Current initiatives that are underway are for example new rules for crypto assets service providers, new requirements on ESG and stricter rules on operational resiliency. Lex Mercatus helps firms to keep track of what is relevant and what is not.
Environment Social & Governance (ESG)
The new regulatory framework around ESG is one of the biggest regulatory changes of this moment. And almost every firm will be affected by these new (European) rules, whether it is about more gender equality in your organization, monitoring the CO2 emissions of your firm, how you reward your employees and managers or how you report annually about your firm’s contribution to a more sustainable society. Everybody and every organisation will be affected. Do you want to know how these rules will impact your organisation?
Prudential Requirements
Since a few years the prudential framework for non-banks has become much more complex and capital requirements have increase dramatically for most firms. Since the implementation of IFD and IFR, most firms are no longer subject to banking rules of CRD and CRR. But although the IFD/IFR is a more proportional prudential framework tailored to the activities of investment firms, it is by no means simple and straightforward and requirements about the minimum capital, the capital calculations and the reporting can be quite complex. And on top of that the IFD introduced strict requirements on the governance and remuneration of investment firms.
Advocacy & outreach
Most financial market participants understand that there are rules that need be adhered to and that these rules ultimately lead to a fairer and more efficient market. But sometimes the regulators are legislators propose new rules that seem to make no sense for your firm’s business activities, or that are disproportionate or simply impossible to comply with. In those situations it is good to reach out to those regulators and legislators and explain how their proposal could be improved so that they achieve the same desired outcome, but without disproportionately high compliance costs or new barriers to entry. Politicians and regulators are often willing to listen if you have legitimate concerns, as long as you do not only come with problems, but also offer solutions.
Governance & Remuneration
Whether you are a small firm with 10 employees or a large multinational with more than 1.000 colleagues, every financial market participant is subject to requirements on governance of their organisation and remuneration of their staff. What you exactly have to comply with and what not depends partly on the size of your company, but you can think of rules around independent supervision (supervisory board), an audit function, a remuneration committee and the selection process for senior managers and diversity in the board. Lex Mercatus can help you with finding the right governance for your organisation.