Goldman Sachs, HSBC, Barclays, BNP Paribas, and another unnamed bank have formed a consortium to adopt a common global approach to disclosing clients’ stock positions. The aim of this initiative, called Endoxa, is to minimize the risks of under-reporting and increase transparency in the market. The group is working with RegTech specialist Droit to develop a tool that will streamline efforts and lower compliance costs. By creating a common digital machine-readable code, the consortium members hope to ensure consistent compliance with reporting rules.

The move comes as regulators require investors to report their securities holdings when certain thresholds are breached, leading to complex and time-consuming analysis of rules. These interpretations can sometimes be subject to missteps and penalties due to potential variations in understanding. By establishing a collaborative approach, the consortium aims to address these challenges and provide a more consistent understanding and application of the rules. The development of a common framework is also expected to bolster confidence in the accuracy and reliability of market data.

While the consortium focuses on improving reporting rules, it also aims to address the surprise factor that can arise from large stake accumulations by investors within the bounds of the rules. Confidentiality in building positions will still be maintained, but the consortium will work closely with regulators and lawyers to clarify and agree upon the interpretation of disclosure rules. The members of Endoxa hope that other banks will join the initiative over time, further harmonizing the application of reporting rules. Ultimately, the goal is to create a level playing field and ensure consistent adherence to regulations across the industry. However, some experts caution that regulators should closely monitor such collaborative efforts by banks to interpret rules and ensure they are appropriate.

In summary, Goldman Sachs, HSBC, Barclays, BNP Paribas, and another bank have formed a consortium called Endoxa to adopt a common global approach to disclosing clients’ stock positions. The consortium aims to streamline efforts and lower compliance costs by developing a common digital code that ensures consistent compliance with reporting rules. This initiative seeks to address the challenges of under-reporting and provide greater transparency in the market. The members of Endoxa hope to establish a level playing field and improve the accuracy and reliability of market data.

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