- Typically over a day or two the board or similar senior management will review the longer term impacts of regulatory or other change such as:
- Increased capital cost / balance sheet impact (clearing, margin on non-cleared trades, operational risk model, credit)
- Market shift from principal to agency model
- Building the Best Execution Policy
- Best practice ethos. Fundamental change in sales/client and sales/trader relationship
- Building out a secondary trading market
- Planning for an educational programme across the markets
And decide how best to position the business and markets to survive and take advantage of any relative strengths under the new market models. This exercise is a vital first step in the wider initiative planning. If the overall plan does not consciously direct the business towards the anticipated market and business structure, the institution's regulatory development will deliver a set of unaligned controls and restrictions that do not allow the institution's business to operate efficiently within the market structure as it then exists.