January 19, 2021 4:19 pm Published by

If you haven’t heard the term “RegTech” before, let us briefly explain what it means. RegTech is a fusion of Regulation and Technology. It is a continuously growing industry and it is considered a sub-area of FinTech. 

RegTech automates and improves the compliance of companies with regulatory requirements. It actually provides organisations with a smart and efficient solution when it comes to compliance with complex regulations. RegTech applications are built using Artificial Intelligence, Big Data, Cloud Computing, Machine Learning and Blockchain. At the moment, RegTech is widely used in highly regulated sectors such as finance and healthcare. 

Believe us when we say that compliance with  regulations causes headaches to lawyers and compliance officers as the risks of getting fined or sanctioned in the event of failure to comply are extremely high. Especially when it comes to massive corporations that issue debt instruments such as bonds listed on the world’s busiest stock exchanges or engage in derivatives and securitisations transactions, it’s not only about the risk of getting a fine but also about their reputation in capital markets. Hence, RegTech comes to support the work of capital markets and finance lawyers and minimise the risk of compliance failures. 

Taking into consideration the complexity of regulations such as EMIR, MIFID, PSD and the Securitisation Regulation, RegTech solutions are proven to provide invaluable help to stakeholders. Especially when authorities such as ESMA, FCA and BaFin have significantly increased their audits in order to ensure compliance and prevent another systemic shock, RegTech automations are saving lawyers a lot of time and hassle whilst effectiveness is guaranteed. The use of standardised RegTech approaches reduces the implementation effort and enables companies to be better prepared for new, complex regulatory requirements and audits.

RegTech is also very useful when it comes to the drafting of extremely complex debt instruments documentation such as the prospectus of a bond issue. Imagine the costs and time that one could save if this process could be automated even partially! Well, it is actually happening! For instance, Scribestar is a RegTech platform that automates processes in relation to issuance and listing of debt instruments and shares.

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