tv Bloomberg Businessweek Debrief A Conversation With Justin Trudeau Bloomberg June 16, 2018 5:00am-5:30am EDT
>> revising the rule the s.e.c. law bringing regulators closing to rolling it back. e fine out how to police the countries that haven't adapted to the new regime. e look at how countries are adapting to avoid falling foul of u.s. sanctions. welcome to "bloomberg markets: rules & returns". it is the show where wedel much regulatory challenges
and opportunities of financial markets. at the t's get a look news. >> regulators appointed by are closer to rolling back the key part of banks safe after the 2008 financial crisis. .e.c. is the last of five to back a public consultation on revamping the law. feedback from firms lawmakers and wall street a second ll holds round to make the changes final. france is proposing a rule to make life harder for according from brexit to a policy it wants to tighten themalents laws to require to set up a branch in the e.u. before they are allowed to serve clients there. officials say some e.u. states have pushed back against the say it is too ey soon for such wide ranging regulation.the
two of america's biggest are ocurrent si phrorpbls bases.g how to build the d registration asd a brokerage with the s.e.c. could potentially apeace watch doors threpbltsing to market.n the that is the regulation news. >> thanks, ed. dpr came in effect may 25 but not adapted laws. i spoke to the architect commissioner for justice consumers and gender asking and started by which countries were playing catch-up. don't want to name and shame. there are still eight countries not ready by the end of this month so we have eight the chance ich have to have their laws adapted by
june.nd of but still eight remaining. the commission is trying to help them to share the necessary information so that to support in their activities and we we are not l that happy about such situation. also wrot a letter to the ministers who are involved in t the data prosecution to encourage them to speed up. what issues do the nonadaptation of the eight create for you, what ?ssues does it create for you > well, the connection with gdpr and general is in the entitle that is generally the regulations which lifts the space of the member very to cover the not detailed topics in their initial
legislation. how the public sector can have national law covering the specific issues related to the public sector. view it is a problem for the member states that there is legal un certaincertainty and that is why we are pushing ready as soon as possible. >> so far you are pushing but any and how will you take concrete action against these eight countries? skwraoeurb>> we will take actio time. monitoring what is happening in each member state. is he way also the u.k. fully compliant or should be gdpr and in the have toproblems we will take action. e know that the commission has
obligation and right at the same infringement an procedure which might happen year. >> we have talked about so far eight countries that have not adopted gdpr within their laws. i want to talk about consumers. aware because you are on twitter there was a lot on inundatedia about how consumers were with notifications to up tkaedate th privacy. if the scenario consumers ound it too bothersome and say they have taken zero action so far in terms of updating their because there's too much to do. is that a good outcome for you? well, first of all, the consumers, the people should gdpr should then them keep control over private data. now facing they are wherealanche of questions
they are concerned and i think stage of the ial implementation of gdpr and my is age for the consumers please don't be annoyed about that and think that you really give the consultant to all of them that -- consent side the people complain and the other they tell surprised that our private data was circulating in different systems and processed by so many different countries and we didn't have a that.bout this is a big inventory exercise opportunity to decide whether i want to have my rivate data in all those systems. also a ssioner, you are consumer yourself. have you closed any of your social media accounts other than facebook? >> i only closed facebook.
this is a practical communication tool as a and i didn't got some questions or requirements for the consent because obviously not so much a participating wealth.e >> let's turn to the perspective of businesses. how often do you expect the ators to enforce ultimate penalty of businesses of noncompliance. of fine of up to 4% of worldwide revenue for serious violations. >> of course, it is the ceiling. sanction.he possible the regulators in the member impose the eady to sanctions in case it is necessary. criteria for imposing he sanctions in the gdpr and prohibition that they will be
way so in proportionate which ight be breaches cover several member states so together in coordinated action decide about the proce proportionality of each sanction to each case. i aking about maximum fine, can imagine that it hrwill be the most harmed breaches covering hundreds of millions of people. but i don't want to say anything in detail because it is the -- task for the uthorities to monitor the case and assess properly and to decide on the necessary sanctions. thing, i'm in very requent contact with data
protection authorities from the member states and i understand they cannot that be only the sanctioning machines. rolls.ve other they are consulting, advising, provide necessary guidance is a pwebusinesses so this matter of examines might so.dible this will to do that is why i urge the ministers n my letter to look into the examines data protection and there is a need in some states. >> that was my interview with the european commissioner for consumers and gender quality. up next we look at how one of opaque is adapting to gdpr. we will have that next. this is bloomberg.
>> this is "bloomberg markets: rules & returns". we are at the european headquarters in london. talk alternative asset investing. it is a sector that is hilly slow to digitalize. nd the requirement to judge suitability of each client means large amounts of sensitive data and stored.ptured how is that affecting the way it gdpr rules. us, to have you with carlo charles. opaque seeing a sector and paper based but large amounts of data. has gdpr been a nightmare. >> no. indicated that we are a technology business and we work
lots of financial advisory firms and with the management digitize we help them funds into their fund managers and as you described historically that has paper based and we are changed that so they can comply. question, mostour gdpr m were very aware of and what they needed to do about it. the industry that has gone through is making sure he base sharing contract has been updated so we've worked closely with those to make sure permission to share data. and that is very different to in-box are seeing in our which is the barrage of e-mails you.ng can i still talk to >> i will get to that but i am wondering about the complexity compliance. has that been an issue?
and how have you gotten around it? so let's put lex an example in place. , u referred to an instruction to have sense ng active data to judge suitability previously captured that on a 20 or 30 page application form that includes and who is client investing but whether is their net investment assets. they suitable for the high risk assets. paper has been in a filing cabinet. gdpr f you think of how impacts individuals, the firm as to be able to tell that individual any time what they hold and if you are a fund philadelphfirm and are hold on.g data you need it move >> does that mean adapting more
to technology if >> very much so. a perfect example of that would sortchnology enabling that of information to be available t the point it is needed and then removed thereafter rather than sit around. pointed earlier to the gdpr what is unique about you need explicit consent from individuals. withis challenge for users indocks inundated with -- in-box but what does that pose for the industry you work in? >> people need to be conscious f what you are trying to achieve and we would have received lots of e-mails. mostly having to do with marketing. we want your business. ou, i'm sure, were like i and everyone else i know, mostly we haven't responded. forsure they will find ways me to respond back to them in
the future. >> the high net worth clients of advisors have they been giving explicit consent easily? you need to make it is a or permission rn to share my data and clients of our advisors already have a contract thattheir advisory firm so data can be shared. , back to my eing forier point, the necessity everyone to have data sharing contracts. few examples that i would consider to be slightly over those interpretation where, a fund manager may in a very ed advice deliberate interpretation of the ules that says they are not sure they can actually provide evaluation data back to the behalf of the client
unless the client has told the so. manager income do that points to perhaps a contract when this client first might have been three or four years ago being out of date. few u are finding a circumstances like that. the way to change that is to make sure cts and that you are not checking things ou don't need and you are very clear on what you are getting when and why. >> what is the cumulative impact so far of this? good thing byis a the way. i think all of this is a good thing. effect on people we work with financial advisors and fund managers and our job in is to put y business the two parties together. they have been doing business together a long time. helping them to communicate more closely. he key impact is effectively institutionalizing what has asset cally been an
class. more quirement to be explicit on the fee structure and how that is reported. marks to ement for produce a transmission document. his is something they didn't have to do and it brings it more n line with financial services generally. >> charles owen founder of thank you. as the u.s. increases sanctions against people and countries how they don't ake sure go foul of the rules. about that next. this is bloomberg. ♪ ♪
headquarters in london. in april the white house took allies of vladimir putin. the owner of a steel producer the impact rattled the gh markets disrupting metals global supply chain and but how rices soaring did they negotiate the web of associate and affiliates around that. one of the many problems faced by complains departments in the current climate. joining me is the managing director and financial services compliance segment navigant consulting. is complying with sanctions as a challenge for financial service companies as with regulations? complicated.y there are different regimes and it a hat are related just country like iran or cuba. individuals.ted to
some of these recent ones that the entioned relating to russian oligarchs are those and thated entities and others might be related to something el crimean sanctions is some of them you have to hold the data and some it.have to reject it is very complicated and a big of cost and concern for .inancial services st. augusti institutions affecd as smaller and medium size? >> larger institutions probably have better infrastructure for it but have more complicated systems. if you are a large financial institution this has grown to or various different regions in the world you may have different systems that other lways talk it even
perfectly. don't always match up. certain u try to get transactions and look at it across the globe sometimes there glitch or gap in some transactional information. for a large lt institution it can be quite a challenge. or smaller institutions it is hard because it does require so uch just to do this in a plain way. if you have any sort of do trade d product or transactions there are documents that might be on paper still or of the names may be embedded in document and it is in an easy feel to see and address. for both there are issues. >> does technology help? >> technology is working. that sort of how can we make it better. if you think of the massive information that goes through large financial institutions in every does and every
client takes on there is a lot of false positives or names that luke -- like a name that differently and there are algorithms or commercial software that looks it. how do you get through that? a lot of focus on using machine intelligence to do some of that work. area that is an area f growth in the money laundering side andanctions corruption.bery and >> we talked about the role of technology being in compliance regulation on this program, but i'm wondering when you use echnology and compliance does that call for less human capital r a different kind of human capital? idea hink it requires the of using artificial intelligence or machine learn something just what it doesn'tance
is the why question. it shows you connections that to might not have been able see before but then you need a subject matter expert to look at does this and see connection make sense? is it relevant or not relevant matter expertise is quite important if you are oing to be using machine learning. the issue is maybe you don't need as were as a junior level. need more people or people with different kinds of kills or retrained people to look at the output in a room way. >> give us an example of an of compliance that would be very hard or impossible to automate. involved.a judgment you can use it to take large amounts of data and analyze some at least where things look like they seem to be behaving in her or a certain way but you cannot use that to actually go underneath transactions and
understand the transactions and say this really is irrelevant to us. fact these two actors is ved the same way irrelevant now that we know their business. so you need that human level to say this makes sense, that has to relevance to us. paced on purr o output -- based on pure output get you anywhere. >> how is the growth of cryptocurrent y effecting t clients. sort of core financial institutions on what there should do with it. with it is ue transparency. financial institutions need to know their customers and know what is happening and know the owners are of accounts and transactions and he whole concept behind crypto-currency is there is not that transparency. with you get comfortable
the product. it is just a product. how do you get comfortable with product if you can't identify who the actors are involved. going e of this work toward that different regulators are trying to regulate some of and see how the contain works and how they get that. an ongoing area and i think there is growth but it seems like every time there is crypto-currency there turns out to be another scam or pulls people back. but i think there is a lot of activity and focus. we do quite a bit in this space there is a lot of growth. > the managing director and financial services advisory and compliance segment leader. thank you so much. that is it for "bloomberg markets: rules & returns". or ou have any questions comments you can e-mail the team .net.les returns @bloomberg what's a gig of data?
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