Bringing voices together to promote well functioning markets
Every Friday, we send you an email of top articles related to corporate bond market development. The newsletter is a free service.
Sign Up!
Join Discussion ⌄

Project Sentinel Completes MiFID II Technology Specification – The Desk 

Author: \ July 28, 2016 \ 8 Comments
Full Article: The Desk

Project Sentinel, the bank collaboration to mutualise the cost of MiFID II implementation in the OTC front office, has completed the detailed business requirements that meet MiFID II regulatory obligations.

Comments
  • WolverineJuly 29, 2016"The emergence of this project clearly illustrates that the historical models of buying or building core banking technology on an individual basis, particularly for the purpose of fulfilling regulatory obligations, are no longer viable. Building individually is too expensive, carries no competitive advantage because everyone has essentially the same requirements, and carries too much risk of failure, which, when regulation is involved, is not an option. Buying individu…"
  • Leon
    LeonJuly 29, 2016"The one year delay has provided an opportunity for the market participants to think strategically on MiFID II implementation. There is a small windows – closing quickly – for organisations to collaborate together and think outside of the box. A difference between the majority of the collaborative initiatives and Sentinel is that MiFID II is not a nice-to-have and has a firm deadline: Wednesday 3rd of January 2018. Participants will be compliant but at what costs and w…"
  • Cholo
    CholoJuly 29, 2016"Inv.Banks have been too short sighted in terms of IT, and never wanted to share anything. Big mistake!!!! All of them are suffering on the cost side. It really makes a lot of sense to collaborate among like-minded banks, and share IP & IT cost in non alpha-generating / value differentiating activities. It really makes me wonder why nothing is happening on the Operations side…. A no-brainer would be to do something similar in BackOffice (collaboration / utility mod…"
  • Wolfman
    WolfmanJuly 29, 2016"Banks will always be reluctant to outsource their core competency, but there are myriad examples of coopetition when technological solutions are delivered. Banks generally don't build their own ATMs but do think of innovative ways to improve their customer experiences with them. SalesForce had become the ubiquitous CRM tool and I would suppose that with enough capital behind them, Sentinel can become a similar tool. I don't know what that does for companies that curre…"
View More Comments
Join the Discussion

Leave a Reply

8 Comments on "Project Sentinel Completes MiFID II Technology Specification – The Desk "

avatar
  Subscribe  
newest oldest most voted
Notify of
Merlin
Member
Merlin
This seems like a worthy project to me. For far too many years individual banks have wasted hundreds, yes hundreds, of millions of dollars trying to build internal solutions for a multitude of problems and then tried to shoe horn different businesses into these solutions. This seems quite intelligent. If firms realize there is no competitive advantage, unless one really believes they can build the only MiFid II compliant system, pool resources and brainpower and get something quicker and cheaper by spreading the costs around. Think there are many likely tools that sell side and buy side firms could potentially… Read more »
Vote Up0Vote Down  Reply
2 years ago
Jester
Member
Jester
It is funny how a disastrous piece of regulation like MiFID II can cause dealers to be more thoughtful about their distribution strategy. For too long fixed income dealers have been under the influence of their own Kool-Aid, believing that they could gain an advantage by building all of their technology solutions internally. One dealer in particular thought so highly of themselves as to develop their own coding language. Yes, a language only their elite group of employees could learn and use because clearly, the coding languages used by the rest of the world were not good enough for them……Small… Read more »
Vote Up1Vote Down  Reply
2 years ago
Iceman
Member
Iceman
On the face of it when sell side and buy side alike continue to bemoan the increasing costs to doing business under an ever changing and restrictive regulatory regime were vendors seem to be making more money than ever it would seem sharing costs in areas (and as Merlin rightly highlights there are many) were the goal is to comply and not be number 1 makes total sense. Both Neptune and Sentinel (who comes up with these names!!) seem to be just that. Taking expensive market structure changes and adopting a shared, collaborative model were all can benefit equally. The… Read more »
Vote Up1Vote Down  Reply
2 years ago
Terence & Phillip
Guest
Terence & Phillip
You have got to think you will see more and more of these types of initiatives as Banks struggle with costs/profitability and regulation is such a burden on these. As per the other comments, it has to be in areas that Banks truly believe the avenue for competitive advantage is so small, or non-existent, or so painful (as in this case) as to make such an initiative a no-brainer. My concern here is that things could become quite unruly if you have different projects for the many, many areas Banks can work together on. All of a sudden, the projects… Read more »
Vote Up0Vote Down  Reply
2 years ago
Wolfman
Member
Wolfman
Banks will always be reluctant to outsource their core competency, but there are myriad examples of coopetition when technological solutions are delivered. Banks generally don’t build their own ATMs but do think of innovative ways to improve their customer experiences with them. SalesForce had become the ubiquitous CRM tool and I would suppose that with enough capital behind them, Sentinel can become a similar tool. I don’t know what that does for companies that currently provides these technologies, but I would expect the product of the consortium to be open source and available. Now if could just nail down what… Read more »
Vote Up0Vote Down  Reply
2 years ago
Cholo
Member
Cholo
Inv.Banks have been too short sighted in terms of IT, and never wanted to share anything. Big mistake!!!! All of them are suffering on the cost side. It really makes a lot of sense to collaborate among like-minded banks, and share IP & IT cost in non alpha-generating / value differentiating activities. It really makes me wonder why nothing is happening on the Operations side…. A no-brainer would be to do something similar in BackOffice (collaboration / utility model / cost sharing). Fully agree with Merlin: what is the point of investing so much money in internal solutions for common… Read more »
Vote Up0Vote Down  Reply
2 years ago
Leon
Member
Leon
The one year delay has provided an opportunity for the market participants to think strategically on MiFID II implementation. There is a small windows – closing quickly – for organisations to collaborate together and think outside of the box. A difference between the majority of the collaborative initiatives and Sentinel is that MiFID II is not a nice-to-have and has a firm deadline: Wednesday 3rd of January 2018. Participants will be compliant but at what costs and with which solutions? Will they have the right tools that will avoid to increase the operational risk of Sales team? Will the traders… Read more »
Vote Up0Vote Down  Reply
2 years ago
Wolverine
Member
Wolverine
The emergence of this project clearly illustrates that the historical models of buying or building core banking technology on an individual basis, particularly for the purpose of fulfilling regulatory obligations, are no longer viable. Building individually is too expensive, carries no competitive advantage because everyone has essentially the same requirements, and carries too much risk of failure, which, when regulation is involved, is not an option. Buying individually means entering into further recurring licenses agreements with the well -entrenched, incumbent vendors, some of whom appear to be viewing the onslaught of financial regulation as an opportunity to tighten the noose… Read more »
Vote Up0Vote Down  Reply
2 years ago
Related Posts

Blackrock’s Richard Prager: The Liquidity Is Out There – Institutional Investor

March 18, 2016

Everyone is Worried About the Thing Markets Need Most, But They’re Not Asking the Right Questions – Business Insider

March 25, 2016

US Companies Overpaying for Bonds; Banks May Be to Blame – Reuters

March 31, 2016