Data Governance for Regulation

Regarding security within data governance, the European Union’s General Data Protection Regulation (GDPR) and Markets in Financial Instruments Directive II (MiFID II) are applicable, as is US 31 USC 310, a regulation addressing data in the context of financial crimes.

On a broader scale, the US Dodd-Frank Act addresses record-keeping transparency. The US Comprehensive Capital Analysis and Review (CCAR) framework addresses data quality and management. In Europe, MiFID II addresses data collection processes, while Basel III contains data governance provisions within the context of risk management and capital adequacy concerns.

In China, the Banking and Insurance Regulatory Commission (CBIRC) issued guidelines in May 2018 that include provisions for financial firms, assigning responsibility for setting up data governance systems, data quality control and related incentive and accountability systems.

Although MiFID II, Basel III and the BCBS 239 rules addressing risk data aggregation come from Europe, they do influence compliance throughout Asia and globally. In addition, the International Financial Reporting Standard (IFRS) created by the International Accounting Standards Board (IASB) sets classification and accounting rules that can figure into data governance. Any firm forming their governance framework should be aware of these provisions.

So, with a good handle on data governance traits and rules, firms may also deploy enterprise data management (EDM) and master data management (MDM) systems as a means to carry out the provisions made in data governance. These systems scrub, enrich and curate data, to standardize how data is defined and produce metadata that helps implement data governance frameworks, with integrity, accountability and security.

With knowledge of the elements of data governance, both as part of a firm’s native efforts and its compliance requirements, management will be better equipped to do business in the markets and lower their operational and regulatory risk.

Source: GoldenSource

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