Corporates will be able to join SWIFT’s KYC Registry from the fourth quarter of this year, the global payments network has announced. Access will initially roll out to the 2,000 corporate groups already connected to SWIFT. Once aboard the Registry, they will be free to upload, maintain and share (know your customer) KYC data on their banking relationships. Meanwhile, banks will benefit by having access to that data through the same central repository they use for their correspondent KYC checks. This will enable efficient information sharing through a secure utility designed to eliminate duplication and inefficiency.
SWIFT’s head of KYC Compliance Services, Marie-Charlotte Henseval, said: “Corporate treasurers cite KYC as one of the top three challenges they face in their bank relationships. We’re pleased to be extending what is already the largest KYC registry for banks in the world to corporate customers. This unique and well-established utility already delivers huge benefits to banks, and its extension to corporates will extend them the same advantages, with a standard agreed by the community and a secure platform enabling efficient data sharing.”
Treasurers have given SWIFT’s move a warm welcome. Dassault Systèmes senior director of group treasury & financing, John Colleemallay, said: “KYC for corporates is a dream come true for all treasurers, considering the heavy workload involved in providing the same documentation several times in multiple formats to our banking partners. We look forward to having a secured shared registry where we can more easily and rapidly complete the KYC processes.” Siemens Treasury head of bank relations Stephan Ziegler added: “With SWIFT announcing KYC for corporates, we are delighted to see a well-positioned player moving ahead to answer this need with the full strength of its banking and corporate community.”
UK-US clearing activity and derivatives trading will be protected regardless of the shape Brexit takes, the Bank of England, Financial Conduct Authority (FCA) and US Commodity Futures Trading Commission (CFTC) have confirmed. In a 25 February joint statement, the authorities assured firms that steps to preserve continuity in the transatlantic markets would play out in three tranches:
Bank of England governor Mark Carney said: “Derivatives can seem far removed from the everyday concerns of households and businesses, but they are essential for everyone to save and invest with confidence. As host of the world’s largest and most sophisticated derivative markets, the US and UK have special responsibilities to keep their markets resilient, efficient and open. The measures we are announcing today will do that.”
CFTC chairman J Christopher Giancarlo added: “London is, and will remain, a global centre for derivatives trading and clearing. Given the long-established cooperation between the CFTC and the Bank of England, FCA and Her Majesty’s Treasury, I am pleased to announce these important measures. They provide a bridge over Brexit through a durable regulatory framework upon which the thriving derivatives market between the UK and the US may continue and endure.”
With the UK’s 29 March departure from the EU just weeks away, a senior FCA figure has suggested that the regulator will be particularly vigilant for signs of market abuse as the finance industry finalises its preparations. In a speech marking the UK’s implementation of the EU Market Abuse Regulation (MAR), FCA director of market oversight Julia Hoggett said: “I am always wary of mentioning the B-word. However, I think that it is important for us to think about the implications of Brexit on the longer-term functioning of our markets.”
Hoggett pointed out: “MiFID II has been – among many things – an exercise in bringing together a common rule book and a standardised set of transaction reporting in service of greater surveillance of the European markets. While the FCA will work to ensure we continue to have the most robust and collaborative regime possible after Brexit, firms must consider how their institutions could be used for market abuse in this evolving context. While activity may move, it is extremely important that the quality of controls remains robust.”
She noted: “Firms must not have gaps in their oversight and, equally, must remain confident that they can still see the big picture of the behaviours they are facilitating – even across multiple borders. We have seen examples in the past where firms leave themselves exposed to the risk of facilitating financial crime by failing to ‘knit back together’ activities taking place within their institutions. There is no doubt that, where activities are shifting and moving, this risk has the potential to intensify. We wish to continue to work closely with market participants to understand and mitigate this risk.”
Two leading investment houses have joined forces to launch the first-ever sharia-compliant funding strategy for reshaping the energy value chain. The as-yet-unnamed fund will focus on stimulating infrastructure and technology innovations, mainly in the European energy market, with a strong focus on environmental, social and governance (ESG) investment practices. Created by Exergy Capital and Dalma Capital Management, the venture has been conceived as a private equity-style strategy with an eye on ‘uncrowded niches’.
Exergy founder and managing partner Dr Erich Becker said: “The global energy transition is under way and affecting the entire energy value chain – from energy firms, their providers, suppliers and financiers, to end users. The drivers include the need to decarbonise, as well as mounting pressures on, and an increasing appetite for, electrification and digitisation. The next few years of the transition are critical. Investors will need to understand the unique opportunities as they are unlikely to come around again.”
Dalma Capital CEO Zachary Cefaratti added: “Investing in energy of the future provides a hedge to fossil-fuel economies, benefiting investors in the Middle East and beyond who are either directly or indirectly exposed to the conventional energy value chain. The ESG investment thesis is well aligned with sharia principles… this will provide the first sharia- and ESG-compliant, energy-transition private equity structure globally.”
A broader uptake of Making Tax Digital (MTD) standards will unleash a ‘digital snowball’ that could deliver £57bn of productivity savings to SMEs, according to a new report. Published by consultancy Volterra Partners and accounting software firm Intuit QuickBooks, The Productivity Payout describes a roadmap whereby SMEs will be able to realise a host of spillover benefits through their adoption of MTD-compliant technology.
Those benefits, the report notes, will drive increases in SMEs’ productivity levels – for example, by enhancing cash flow and HR management, and freeing up time for mission-critical tasks such as sales, marketing or training.
Intuit QuickBooks vice president and UK country manager Chris Evans said: “This report highlights that a digital-led approach will be transformational for small businesses, who are the backbone of the UK economy. For those businesses, the transition to digital will not be without stumbling blocks. However, it presents a huge opportunity to streamline operations, drive efficiencies and simplify tax. It will enhance cash flow management and allow them to get paid faster and access capital to grow, powering prosperity across the UK.”