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REGULATORY COMPLIANCE & SOLUTIONS

Need a trusted specialist to help accelerate and customize your firm's regulatory compliance?

At Tonic we help our clients accelerate customized solutions for a wide range of Capital Markets regulations, especially focused on post-trade domains.

We don’t just deliver compliance, we deliver bespoke, cost-effective target operating models and solutions, driven by your firm's specific needs.

Our unique combination of expertise allows us to do exactly that.

Find out how we can support your firm

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Collateral & Post-trade - A costly regulatory bottleneck

Collateral and post-trade domains have been hit by a tidal wave of regulations in recent years. Heavyweight regulations that have permanently shifted the landscape include the monsters of UMR and mandatory OTC clearing.

Regulatory reporting has also become part of the furniture, thanks to the likes of MIFID, EMIR, SFTR and SEC’s pending 10c-1 equivalent. Not forgetting the ever-increasing securities settlement penalties imposed by CSDR, nor the latest round of capital requirements via the pending Basel III reform regs. Of course we also have heavy regulations due for new focus areas and technology. These include Sustainability & Climate regulations, in parallel to new rules for the use of Digital technology, which attempt to formalize the usage of tokenization, crypto assets, DLT and blockchain technology, and more.

No doubt that these regulations have helped, and will continue to help, mitigate risk and increase transparency across the industry.

The known downside is that those same regulations have significantly increased the total cost base across impacted firms, eating into firm-by-firm profits each year.

But one thing we can be sure about, is that the regulatory engine never stops.

Post-trade Regs - An Opportunity?

With so much regulation hitting the same components of post-trade infrastructure in parallel, it’s difficult to find many positive headlines.

However, it is undeniable that firms have now been presented with a natural opportunity to deliver a more consolidated, post-trade target operating model, focused on new technology and our evolving market requirements.

For many firms this period will be the major, single regulatory driver to uplift and future-proof post-trade infrastructure for years to come.

Enhancements will focus on technology, data, process automation and people footprints, all of which may be unscalable and unfit-for-purpose today. Not to mention the cultural changes which must take place to successfully meet growing ESG and climate requirements.

The problem?

The reality is that we’re being hit by this next wave of burdensome regulation whilst plenty of firms experience headcount pressures. A direct outcome of COVID-19, as management gets pushed to deliver higher profit margins.

Often, firms simply don’t have the resource capacity, and/or the expertise, to quickly understand the new regulations, then define and deliver suitable, long-term solutions and target operating models.

The quick fix dilemma

As such, the temptation for firms is to compromise with their compliance objectives.

Firms are often tempted to ditch long-term strategy and focus on tactically ‘getting over the line’.

The worst outcome being that compliance is directly put at risk, based on the unsuitability of ‘sticky plaster’ solutions and manual processes.

At best, compliance may be delivered in the short-term and at a lower cost, but that can often be a false dawn.

We’ve all seen tactical post-trade operating models which quickly become insufficient to meet growing business volumes and needs, due to being too manual, unscalable and inflexible.

The end result?

Post-trade infrastructure becomes a drag on Front Office profits and a potential compliance risk. Neither of which are very appealing.


Unwinding that same tactical operating model will become a far more expensive exercise than delivering a more strategic, considered target operating model first time around.

Why TONIC?

Our USP is that we are genuinely expertise-led. Our practitioners own end-to-end expertise across four key streams, covering Domain-Transform-Regulation-Vendor.

Our industry specialists also hold deep experience in the successful delivery of many regulations and target operating models, across Dealer banks, buy-side firms and Custodians. There aren’t many scenarios that we have not seen, or learnt from.

But what does that expertise actually mean?

Well we combine our toolkit of expertise with an accelerated 'Health Check' analysis of our clients’ set-up, which ensures that we always define the right solution decisions for them. Once done, we execute their target operating model precisely, leveraging our speed and agility throughout.

We are able to lead individual regulations, or multiple regulations combined, for our clients. By supporting a client with multiple regulations, we produce consolidated x-domain target operating models, therefore maximizing our client’s target state benefits.

Tonic Approach

At Tonic we offer a flexible approach to our regulatory compliance services, driven by the needs of our clients.

We do this by providing a modular menu of analysis, strategy, definition and delivery services. The key compliance modules that we support are shown below.

We can either deliver specific service modules or lead the full end-to-end delivery, as required.

Find out how we can support your firm

Get in touch