Complying with the Financial Services Reform (FSR) provisions by the upcoming deadline of 11 March is just the beginning. The real challenge will begin as companies try to explain the details to their whole business and as they determine what the regulations actually mean in practice, according to the head of legal and risk services at BT Financial Group.
In an interview with Lawyers Weekly, Gai McGrath said that it is the business of law firms to help businesses through the process of complying with, implementing and understanding the FSR regime. Law firms needed to be in touch with the issues that companies face under the FSR regulations, she said.
The funds management industry had a number of issues to deal with, “so the firms working in that industry need to be on top of what those issues are — both from a business and a regulatory perspective”, McGrath said.
Also, suggesting that law firms did not just provide technical support to their clients, McGrath said that “it’s the perspective and the learnings that we want from the law firms, to give us the benefit of their experience from a business perspective, not just a legal one”.
For in-house counsel, the legislation has been so complex that there have been many aspects that haven’t been worked through from a policy perspective. This meant that issues were still “coming out of the wood work”, McGrath said.
She added it had been difficult trying to explain and apply the rules within a complex business like BT.
“The business people cannot understand why you can’t give them a black-and-white answer on how it impacts on them. It’s a matter of trying … to translate what is very complex legislation into a set of business rules.”
For law firms this had also been a challenging issue, said McGrath. A number of private practice firms had been “overwhelmed” by the complexity of the legislation they have had to deal with on behalf of their clients, she said. “They have the added disadvantage of not being able to understand exactly what goes on within their client’s business. We use them for their expertise and perspective,” she added.
Claiming that “it has become an exercise in ticking the boxes”, McGrath said that meeting the deadline was just the beginning of the FSR provisions. The real work now, McGrath suggested, was in making the new regime work for the business. After the 11 March, she explained, the question will be “how can we leverage this for our business, how can we make our business better as a result of this regime?”