• At Kemp Little, we are known for our ability to serve the very particular needs of a large but diverse technology client base. Our hands-on industry know-how makes us a good fit with many of the world's biggest technology and digital media businesses, yet means we are equally relevant to companies with a technology bias, in sectors such as professional services, financial services, retail, travel and healthcare.
  • Kemp Little specialises in the technology and digital media sectors and provides a range of legal services that are crucial to fast-moving, innovative businesses.Our blend of sector awareness, technical excellence and responsiveness, means we are regularly ranked as a leading firm by directories such as Legal 500, Chambers and PLC Which Lawyer. Our practice areas cover a wide range of legal issues and advice.
  • Our Commercial Technology team has established itself as one of the strongest in the UK. We are ranked in Legal 500, Chambers & Partners and PLC Which Lawyer, with four of our partners recommended.
  • Our team provides practical and commercial advice founded on years of experience and technical know-how to technology and digital media companies that need to be alert to the rules and regulations of competition law.
  • Our Corporate Practice has a reputation for delivering sound legal advice, backed up with extensive industry experience and credentials, to get the best results from technology and digital media transactions.
  • In the fast-changing world of employment law our clients need practical, commercial and cost-effective advice. They get this from our team of employment law professionals.
  • Our team of leading IP advisors deliver cost-effective, strategic and commercial advice to ensure that your IP assets are protected and leveraged to add real value to your business.
  • Our litigation practice advises on all aspects of dispute resolution, with a particular focus on ownership, exploitation and infringement of intellectual property rights and commercial disputes in the technology sector.
  • We have an industry-leading reputation for our outsourcing expertise. Our professionals deliver credible legal advice to providers and acquirers of IT and business process outsourcing (BPO) services.
  • We work alongside companies, many with disruptive technologies, that seek funding, as well as with the venture capital firms, institutional investors and corporate ventures that want to invest in exciting business opportunities.
  • Our regulatory specialists work alongside Kemp Little’s corporate and commercial professionals to help meet their compliance obligations.
  • With a service that is commercial and responsive to our clients’ needs, you will find our tax advice easy to understand, cost-effective and geared towards maximising your tax benefits.
  • At Kemp Little, we advise clients in diverse sectors where technology is fundamental to the ongoing success of their businesses.They include companies that provide technology as a service and businesses where the use of technology is key to their business model, enabling them to bring their product or service to market.
  • We bring our commercial understanding of digital business models, our legal expertise and our reputation for delivering high quality, cost-effective services to this dynamic sector.
  • Acting for market leaders and market changers within the media industry, we combine in-depth knowledge of the structural technology that underpins content delivery and the impact of digitisation on the rights of producers and consumers.
  • We understand the risks facing this sector and work with our clients to conquer those challenges. Testimony to our success is the continued growth in our team of professionals and the clients we serve.
  • We advise at the forefront of the technological intersection between life sciences and healthcare. We advise leading technology and data analytics providers, healthcare institutions as well as manufacturers of medical devices, pharmaceuticals and biotechnological products.
  • For clients operating in the online sector, our teams are structured to meet their commercial, financing, M&A, competition and regulatory, employment and intellectual property legal needs.
  • Our focus on technology makes us especially well positioned to give advice on the legal aspects of digital marketing. We advise on high-profile, multi-channel, cross-border cases and on highly complex campaigns.
  • The mobile and telecoms sector is fast changing and hugely dependent on technology advances. We help mobile and wireless and fixed telecoms clients to tackle the legal challenges that this evolving sector presents.
  • Whether ERP, Linux or Windows; software or infrastructure as a service in the cloud, in a virtualised environment, or as a mobile or service-oriented architecture, we have the experience to resolve legal issues across the spectrum of commercial computer platforms.
  • Our clients trust us to apply our solutions and know-how to help them make the best use of technology in structuring deals, mitigating key risks to their businesses and in achieving their commercial objectives.
  • We have extensive experience of advising customers and suppliers in the retail sector on technology development, licensing and supply projects, and in advising on all aspects of procurement and online operations.
  • Our legal professionals work alongside social media providers and users in relation to the commercial, privacy, data, advertising, intellectual property, employment and corporate issues that arise in this dynamic sector.
  • Our years of working alongside diverse software clients have given us an in-depth understanding of the dynamics of the software marketplace, market practice and alternative negotiating strategies.
  • Working with direct providers of travel services, including aggregators, facilitators and suppliers of transport and technology, our team has developed a unique specialist knowledge of the sector
  • Your life as an entrepreneur is full of daily challenges as you seek to grow your business. One of the key strengths of our firm is that we understand these challenges.
  • Kemp Little is trusted by some of the world’s leading luxury brands and some of the most innovative e-commerce retailers changing the face of the industry.
  • HR Bytes is an exclusive, comprehensive, online service that will provide you with a wide range of practical, insightful and current employment law information. HR Bytes members get priority booking for events, key insight and a range of employment materials for free.
  • FlightDeck is our portal designed especially with start-up and emerging technology businesses in mind to help you get your business up and running in the right way. We provide a free pack of all the things no-one tells you and things they don’t give away to get you started.

Increased regulation likely to lead to more outsourcing and/or redundancies in the financial services sector

View PDF

 

In the wake of the financial crisis in 2008, the on-going Eurozone crisis and the recent LIBOR scandal, the financial services sector has seen (and will continue to see) increased regulation and scrutiny including the EU Markets in Financial Instruments Directive/regulation II (“MiFID II”), amongst others.

Although MiFID II is not scheduled to be introduced until 2014, the final draft of the legislation is due to be published shortly and banks and other financial institutions are beginning to anticipate the impact that it will have on the shape of their organisations and their staffing requirements.

Effect of MiFID II

MiFID II extends the equity model of MiFID I to other instruments, and so for example will bring trading in over the counter (“OTC”) derivatives, central counter-parties (“CCPs”) and trade depositaries within the same regulatory framework as equities. This will hasten the move towards electronic trading of these types of products and mean increased reporting requirements, mandatory clearing and far greater restrictions on proprietary trading and (along with the beefed up capital adequacy rules) how capital to support these operations is allocated.  All this will be topped off with a new regulator, the European Securities and Markets Authority (“ESMA”) and an enforcement regime with much sharper teeth.

It is likely that many workflows within OTC derivatives and other affected instrument classes will need to change as a result of the increased regulation. Electronic trading, real-time collateralisation and “live” reporting will necessitate moving what are currently considered ‘back office’ tasks into the ‘front office’, requiring significant investment in communications infrastructure and IT to handle this change in process. Most financial institutions are likely to have to make significant investment in their IT as a result. 

Much of the work is likely to be outsourced to large or specialist providers, due to the complexity, delivery timescales and decreased margins available.


Impact on the workforce

Re-skilling

  • Many traders (or desk managers) will find that their front office duties are very different from in the past, with greater responsibility for record keeping and reporting, ensuring sufficiency of funds and capital. This requires a very different mind-set (and skill set).
     
  • Given the squeeze in profits following the financial crisis of 2008, many financial institutions have already cut costs by making redundant senior IT and back office staff who will now be required to oversee such a huge re-shaping of functions and processes.

Redundancies

  • The cost involved may force some businesses to shut down business lines which are not cost effective, as witnessed with the recently-announced closure by UBS of its fixed income activities.

    UBS attributed the winding down its fixed-income activities to “new capital rules on riskier businesses introduced since the financial crisis”. The bank said that these divisions had been "rendered uneconomical by changes in regulation and market developments". 
  • Given the anticipated likely sharp reduction in proprietary trading, long-term future prospects for a large proportion of staff engaged in these functions appear rather mixed. 

Outsourcing

  • The change in OTC derivatives from voice-based to electronic trading and extensive changes in other instrument classes will mean that much more sophisticated communications systems are required. At present, institutions lay trading lines directly to their clients. However, given the regulatory changes, the institutions will need to provide information to each other, to trade depositaries and to CCPs, which could be a communications nightmare. Given the complications involved, institutions are almost certain to consider and in many cases implement an outsourced solution.

    This outsourcing may have implications both for the service provider and the financial institution under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (“TUPE”), which protects employees whose work is outsourced. Employees of the financial institution who are assigned to the IT or communications services being outsourced would transfer automatically under TUPE to the service provider with their terms and conditions and length of service preserved. Depending on the location of the service provider to whom the employees are transferred, this may lead to further redundancies. 

Weighing the balance – outsourcing benefits and employment law related costs

Anticipated cost saving benefits from outsourcing in the new world will need to be weighed up against any redundancy, TUPE and other employment law-related costs at an early stage in what is likely to be a complex planning process.

For more information, please contact Kathryn Dooks