Long before Donald Trump was elected President he was setting out ambitious plans to repeal a swathe of financial regulation put in place in the wake of the 2008 crisis. No fan of the 2010 Dodd-Frank reform law, he has long argued that it has created unnecessary red tape, and he is now taking steps to keep his word and ‘do a big number’ on Dodd-Frank.
His efforts to up-end the equity, bond and foreign currency markets are taking shape, and the new Chairman of the Commodity Futures Trading Commission, Christopher Giancarlo, has indicated a wholesale easing of regulation is on the way for commodities too. Giancarlo says he wants the rules to be less costly and burdensome for the industry, dubbing his efforts Project KISS – standing for ‘Keep it Simple, Stupid’.
Contrary to the perceived wisdom, however, we see such a reining in of the rulebook serving only to heighten, rather than reduce, the already high demand for compliance professionals in our market. The need for compliance staff in commodities firms has been increasing at quite a pace over the past decade, and we are not witnessing any let-up, even with the prospect of Dodd-Frank on the chopping block.
There has certainly been no slowdown in compliance recruitment in the wake of Trump’s election, with some major moves in the market over the past year. We have recently placed a Chief Compliance Officer at a large investment bank, a CCO at a global trading merchant, a Head of Compliance for Supply and Trading at a Fortune 100 company, and a CCO at a leading energy merchant. Certainly, there is no sign that these big firms anticipate any reduction in the rules they need to keep abreast of any time soon.
And then there is the banking side. In the wake of the financial crisis, the raft of new rules that impacted banks forced many to move out of commodities, and we have witnessed a steady relocation of talent away from banks and in to trading firms. A repeal of the regulations could put banks back in the game, and could lead to new volatility in the recruitment market not seen for some time. We are already hearing murmurs about investment banks that have shied back from commodities now looking to make a return to the market.
Some compliance staff that we speak to do anticipate a slowdown in the rule-making process, and think the new version will – in the long term – emerge more streamlined and efficient. But as that process plays out, and the Trump rulebook takes shape, there will be plenty to keep compliance staff gainfully employed. After all, a rule change is a rule change, and whether it serves in future to make a company’s obligations more arduous or not, it requires a change of systems and policies while the business adapts to the change.
Others anticipate very little will change. The truth is, whatever happens, compliance professionals look set to remain in high demand, and good ones will continue to be hard to come by.
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