Financial Risk Management

Managing Regulatory and Compliance Risk

The disclosure and other regulatory requirements that businesses face have become increasingly stringent. For global firms, it is more and more complicated to understand and adhere to the evolving and growing requirements of both domestic and foreign regulatory bodies. Keeping pace with changing requirements demands an in-depth knowledge of foreign and domestic capital markets, the regulatory bodies that oversee them, and the investment and hedging instruments that exist in each market. NERA's experts have helped develop the regulatory frameworks for derivatives and other financial markets both in the US and in countries around the world.

NERA's expertise in market instruments, current trading practices, market rules, and financial regulation enables us to support financial services and other firms in all economic aspects of regulatory policy, including handling market manipulation investigations, defending enforcement action, providing expert testimony, and quantifying regulatory impacts and risks.

NERA has provided economic expertise to clients undergoing regulatory investigations that include allegations of market abuse as well as clients that are the subjects of enforcement actions. In such cases, NERA experts have applied the theories of financial economics in innovative ways. Our approaches to examining regulatory proceedings can use both ex-ante analysis (to help clients think about the regulatory risks facing their organization and the associated costs) and ex-post analysis (to determine the "but-for" scenario had the alleged conduct not taken place and hence the economic cost of the action). NERA has used this type of economic analysis in a range of scenarios, from helping clients understand regulatory costs to providing expert testimony.