The pressure on financial regulators to digitise and standardise their content is growing.
As the volume of regulatory information grows, it is increasingly difficult to process. For international firms, keeping track of rules and updates in different markets, regions and areas of operation – from anti-money laundering (AML) to cryptoassets and environmental, social and governance (ESG) – is extremely tough.
RegGenome provides a solution by digitising and structuring the world’s financial regulatory information. This brings massive efficiencies for staff working for regulators and for the firms they oversee.
Many of the world’s financial regulators are huge content publishers, but they often lack experience in managing information systems. For example, most still don’t provide data in an open-source, digitally-native format that allows entities to easily access and compare rules across the world.
Regulators often store the information on cloud document platforms, which makes it difficult to process. They sometimes publish amendments that do not link to the original rules, so that compliance professionals cannot cross-check or compare guidance and legislation.
RegGenome makes handling this information much easier by converting it into a ‘sequenced’, structured format and making it machine-readable. This enables a compliance officer to search a set of obligations – on ESG, for example – across the entire world’s regulations. They can then classify them into types of regulation; for instance, distinguishing between guidance and law.
RegGenome also automatically updates firms on changes to regulations in their selected regions and topics, saving them significant time and decreasing the risk of missing new rules.
A global ‘common language ’
The University of Cambridge Regulatory Genome Project (RGP) is creating an open information structure for representing financial regulation across jurisdictions and business functions – and a root ontology of regulatory obligations that can be made available to all as a public good.
RegGenome, a founding member of the RGP, commercially offers structured content to regulated firms and third-party applications in the form of the RegGenome Services. RegGenome content is vendor-neutral, so the content plugs into everyone’s systems – driving an efficient ecosystem, all powered by and speaking the same language. This is expected to make ‘Cambridge Regulatory Genome compliant’ a standard approach for organising regulatory information.
The comparability and accessibility of the information is unique to RegGenome and creates a unique reference of regulatory content that compliance officers can use across functions and geographies.
It means a chief compliance officer who is worried about cryptocurrency or ESG risk, for example, has a common basis for searching and comparing all their group’s obligations in that field across the world. This helps them to better understand compliance risk across their group, and to benchmark it against their peers.
Furthermore, RegGenome convenes Special Interest Groups to help firms benchmark their internal compliance regimes against their peers, using the Cambridge Regulatory Genome information structure as a common basis for comparison.
Making better regulation
Regulators typically benchmark their regulatory frameworks against other jurisdictions and international standards, to help them write better rules and ensure better market outcomes. For many of them, better regulation is a source of a competitive advantage at national level. In the past, in almost every case, a regulator would carry out international comparisons before drafting rules, but in an inefficient way – for example, storing the information in a simple spreadsheet, which can create numerous problems.
RegGenome can help because it classifies the world’s financial regulations in a dynamic, machine-readable way, arranged in regulatory themes. These themes include AML, ESG, cybersecurity and data protection.
It organises information with taxonomies, which start by defining and tagging broad topics and then narrowing down on detail, to help the user answer more specific questions about the data. This allows users to contextualise each obligation in the regional or global regulatory framework. So, for example, they can ask ‘what is this beneficial ownership obligation in the context of AML rules in the UK; and throughout the world?’
Collaboration and feedback
Regulators and firms want to collaborate to make regulation better, but they are constrained by not wanting to give the impression of preferential access.
The RGP is linked to The Cambridge of University, which runs the leading regulatory innovation training course via its Centre for Alternative Finance. Over the past few years, the University has trained 1,400 regulators and established strong relations with many regulatory bodies.
RegGenome will build a network of regulators and financial firms that allows them to provide feedback to each other without any sense of preferential treatment. All the relations are managed through The Cambridge of University. This feedback loop will allow powerful collaboration, leading to constant improvement of the RegGenome framework for staff on both sides of the fence.
Demand for regulators’ content is high, driven by firms’ investments in compliance automation and regulators’ own efforts to promote regtech. If you are a regulatory or legislative publisher, your website is accessed by vendors’ crawlers on a daily basis; whatever the legal status of this activity, your content is nonetheless sold with varying degrees of accountability.
RegGenome believes there is public value in regulators creating compliant routes for vendors to access regulatory publications. We work with regulatory publishers as responsible and accountable partners, and have invested in a substantial compliance operation to ensure permissions are in place for our content.
Among our target group of publishers there are already over 140 legislatures and regulatory bodies, including many of the world’s largest, who make their data open to all. Others have separately given RegGenome formal permissions to disseminate their documents at the granular level, including on commercial terms.
The financial firms and regulators RegGenome already works with should give confidence to potential partners.
As more entities leverage RegGenome’s structured content services across the globe, this will increase consistency and firms’ ability to manage their compliance risk, promoting greater integrity and confidence in financial markets.
RegGenome encourages engagement with regulators to support continual improvement of its service. It also welcomes more partner firms to help it establish the de facto standard for organising the world’s financial regulatory information. In addition to the many powerful risk management and efficiency benefits listed here, firms will get first-mover advantage by using ‘Powered by the RegGenome’ as a standard.
If you work for a regulatory body and would like to discuss how to make your data available to industry in a machine-readable format through RegGenome, please get in touch at firstname.lastname@example.org