Large Regional Banks Join in MiFID II Initiative Under Project Sentinel

A new multi-bank initiative has been announced today called ‘Project Sentinel', aimed to help share costs that firms incur related to MiFID II implementation for Over-the-Counter (OTC) related front office trading technology, according to an official announcement from Etrading Software.

Project Sentinel will use a regulatory model with data normalized to help firms meet their front office OTC sales and trading activities, by combining a number of institutions that will contribute to the project that aims to provide shared benefits as a standardized approach to MiFID II regulatory technology is sought.

According to people familiar with the deal, as explained to Finance Magnates around time of the announcement, a number of large regional banks are part of Project Sentinel and with Etrading Software as the project manager.

Industry standard goal

This approach to normalizing the data could help create a standardized approach in the future for helping firms conform to related regulatory Compliance with regard to OTC trading under MiFID II, as firms take a similar and/or measurable approach, in addition to helping reduce costs.

Etrading Software is acting at the PMO to help the group of banks collaborate, as the next phase will be to map out compliant workflows across related trade lifecycles, before the best solutions are chosen to be bought or built for the proposed future common structure.

The new world of online trading, fintech and marketing – register now for the Finance Magnates Tel Aviv Conference, June 29th 2016.

We are delighted to facilitate this important initiative on behalf of market participants to create a modern, low-cost, standards-based MiFID II infrastructure capable of servicing client needs efficiently and electronically.

MiFID II synergies

Sassan Danesh, Managing Partner or Etrading Software, and who co-chairs the OTC product committee for the FIX Trading Community, explained in a statement: “We are delighted to facilitate this important initiative on behalf of market participants to create a modern, low-cost, standards-based MiFID II infrastructure capable of servicing client needs efficiently and electronically.”

Navigating MiFID II reporting and compliance Obligations can be challenging and requires both human and monetary capital to research and implement appropriate measures, in addition to time constraints as new deadlines come into effect.

Collaborative benefits

Meanwhile, on a firm-by-firm basis, these costs add up and Project Sentinel aims to bring together industry collaboration where limited or no competitive advantage will be at risk as the collective benefits could be shared as the combined efforts unlock efficiencies.

In essence, market participants will be able to pool resources with their peers in non-competitive regulatory areas, by investing in a technology solution that is standards-based and compliant with MiFID II to help streamline automated related front-office processes.

Shared approach and costs

The official announcement of Project Sentinel put a focus on reducing costs and risk through combined analysis, interpretation and implementation thanks to the collaborative nature of the project, where the large regional banks involved have common interests in improving their approach to regulatory compliance.

In addition, reducing costs of compliance thanks to a sharing of IT investment costs was described in the project's focus, and creating economies of scale from the resulting creations that the project is aiming for.

The project looks for a consistent implementation of MiFID II across participating firms and to create a flexible solution for the future that could be tweaked for other regulatory regimes such as Dodd-Frank or EMIR, as described in the update.