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Deloitte Legal here to offer a practical approach to financial market regulatory challenges

Interview with Deloitte Legal partner Jochen Blaffert 

Jochen Blaffert is partner and the Financial Services Industry Lead at Deloitte Legal. In this interview, he talks about the day-to-day practice of his department. How does Deloitte Legal distinguish itself, what is his own role and what drives him personally?

We are the go-to party for a practical approach to financial market regulatory challenges, without losing sight of the various internal and external stakeholders.

- Jochen Blaffert

Constant developments in laws and regulations are part and parcel to the Financial Services Industry (FSI), which is exactly why Jochen Blaffert is so enthusiastic about FSI. The dynamics of the playing field keeps him on his toes. ‘Perspectives shift constantly and not a day goes by without any changes. New products, new technology and changing supervisory insights create an ongoing flow of new legislative and regulatory developments. Obviously the market usually outruns the regulators, often translating into challenging situations when the rules come into play.

 

 

We help our clients set the best possible course in this, taking on board that, in view of the future, today’s uncertainties sometimes require a practical approach. Instead of a stand-alone legal analysis, this requires a multidisciplinary view.

 

Starting his career at De Brauw and Freshfields, Blaffert moved on to the corporate sector as a general counsel and Director Legal & Compliance at Atradius and APG, among others. He has been a Big four partner since 2014, where the combination of the multidisciplinary approach of the business world and the content-driven approach of the traditional legal profession appeals to him. His role within Deloitte Legal is twofold, he says. ‘I both manage the legal financial regulatory team and I’m the FSI Lead, which means I’m internally and externally responsible for coordinating all other legal FSI engagements. When dealing with financial institutions, especially, it is important to collaborate with other internal or external disciplines, such as risk, finance, tax and strategy .’

Much of what Deloitte does within FSI revolves around advising banks, insurers and investment management clients on how to apply laws and regulations. New players have become clients, too, such as fintechs or existing companies entering the regulated domain. This may include parties who, driven by technological developments or expansion of their business, become payment service providers or develop financial products that require a licence. Blaffert: 'We then assist in applying for a licence with DNB or the AFM and ensure that the business plan and the business processes are drawn up and designed in accordance with legislation and regulations. We also provide training for supervisory and management board members, for example for their screening interviews and permanent education. Deloitte Legal being part of an international network is important. We advise both Dutch and international parties and we are good at benchmarking, because as a multidisciplinary service provider we get to sit around the table with many parties. This gives us both a clear picture of the market and all of its influential trends and developments, and of the various supervisory authorities’ interpretations.'

According to Blaffert, what makes his work so fascinating is that it encompasses more than just legal advice.

 

We provide advice to the living organisms that companies are, by considering the impact of our advice and the challenges involved in its implementation.

 

Communication is key in this respect. ‘Our advice needs to be legally sound and communication is how we make sure that a company’s other stakeholders, too, can understand how it actually works out. Think of a general counsel or compliance officer who, while requiring a substantive analysis, also has to consult with the management board and operational colleagues. In those cases, we will then often produce an extensive memo', says Blaffert, 'but we will likewise prepare a short PowerPoint presentation to be presented to the management board, on top of which we will draft an easy-to-read document to inform the people on the work floor. So it’s essential for such advice to factor in the non-legal impact as well.'

A good example in this respect is the regulatory response to questions from the supervisory authorities in the case of takeovers, thematic or other investigations, or the licence applications referred to before. ‘This involves large-scale, complex projects, requiring a multitude of different disciplines to make sure everything runs smoothly', says Blaffert. Quite a lot of aspects are involved, such as a risk analysis, a strategic impact, or a business plan with a financial forecast. At the same time, if an institution is being supervised, a great deal of its policy documents will need to be adapted or new ones need to be drawn up, and a lot of communication with the supervisory authorities is involved. These types of projects, some of which go on for months, always have a central project team to coordinate everything. Since we have all the necessary expertise in-house, we can do this smoothly. In a sense we are the mirror image of how international financial institutions are set up, including specialists who know all the ins and outs of capital requirements for banks or insurers, and tax specialists focusing on direct or indirect taxation within the financial industry. But we engage other financial and strategy consultants, too, not to mention experts on risk and the operational implementation of regulations.’

Finding lawyers who can work in a set-up like this is still quite a challenge, according to Blaffert.

 

Our way of advising requires people with a broad range of skill sets: you have to be strong on content, but also speak the language of the different stakeholders our clients are dealing with.

 

But for professionals who, like Blaffert himself, have a broad background, working in his team brings many opportunities and challenges, and he is happy to support people in this, he says. ‘I enjoy building up and expanding teams and helping people in their development. It has always been part of my previous roles, and I'm doing it again now.’ Compared to some traditional law firms, his team is relatively large. ‘It’s because we prefer to have teams perform large projects, but also because it allows us to serve clients better considering the complexity involved. We can take on a lot as a team, on top of which it provides for continuity of advice.’ That’s important, as Blaffert knows from his own experience. ‘As a general counsel I often worked with different advisors, but for matters such as licence applications or other remediation efforts it is preferable to work with a single firm, which has all the disciplines in house. Processes like this can be complex and take months, and then you want to prevent the processes from faltering or, worse, getting bogged down.’

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