Human Capital

The people shaping the financial regulatory landscape

Melanie Waddell

Mar 29, 2019

Welcome back to Human Capital, where this week we catch up with former SEC Commissioner Troy Paredes, who’s heating up the iTunes airwaves with his “Appetite for Disruption” podcast that focuses on, you guessed it — the intersection of technology and financial services, aka fintech.

The founder of Paredes Strategies LLC in New York also spends his days helping financial services firms navigate their thicket of compliance concerns.

Paredes — who was a big supporter of rigorous economic analysis of rules during his time at the commission — also shares some thoughts about the Securities and Exchange Commission’s upcoming advice-standards package, including Regulation Best Interest.

I’m Melanie Waddell in Washington. Thanks for joining again this week as we spotlight the movers and shakers in the financial services regulatory realm. You can always reach me at


Paredes Takes to the Fintech Airwaves

Appointed by President George W. Bush, Paredes served at the SEC during the height of the financial crisis and its aftermath (from 2008 to 2013), which included the implementation of the Dodd-Frank Act – of which he’s not a fan.

Paredes holds a bachelor’s degree in economics from the University of California, Berkeley, and earned his J.D. from Yale Law School. Along with his consulting biz, he’s a distinguished scholar in residence at NYU School of Law and a lecturer on law at Harvard Law School.

As regulatory requirements “continue to mount,” Paredes says, “there’s always a need to make sure that you’re doing what you need to do in order to not only ensure that you’re complying, but more broadly that you have effective and appropriate risk management controls.”

In his mind, compliance must include the “broader effort” of effective risk management.

How is technology shaping the compliance landscape? Technology is not only “being increasingly leveraged for those who need to comply,” but “regulators are using technology for all of their regulatory responsibilities,” in what has been dubbed regtech.

What’s the essence of his twice-monthly “Appetite for Disruption” podcast – which zooms in on the business and regulation of fintech? The podcast is “not just the chance to learn about interesting things that businesses are doing, but the chance to really get into how [are fintech innovations] going to make a person’s life better — that’s where the real promise is.”

You can listen to a recent episode here, in which Paredes and his co-host chat with Chris Concannon, the former president and chief operating officer of Cboe and who’s now president and COO of bond-trading platform MarketAxess.

“For me, when I think about fintech, whether it’s technology that may have existed 20 years ago, whether it’s AI, blockchain or whatever comes tomorrow, I’m very optimistic,” Paredes enthuses.

“The nub of the matter” in terms of optimism: “I always like to think about the ways in which taking advantage of technology, in whatever industry … is going to yield concrete, real-world, tangible benefits for people.”

On regulation and fintech: “If you’re thinking about a particular innovation and applying it, the question comes up: How does it fit within that regulatory construct? What are the things you need to be mindful of? In addition to that, what might be the ways in which the regulatory framework needs to be tailored, needs to itself adapt?

As to the regulated community and the SEC’s advice-standards package, namely Reg BI? “I think there’s an appreciation that it’s a significant rulemaking, and of course we’ll have to see where it ultimately lands.”


What They Said

“There’s a lot of overlap between the existing suitability rule and the direction that Reg BI is going in order to mitigate conflicts.”

--Robert Colby, FINRA’s chief legal officer, on the potential need to revamp or eliminate the suitability rule once Reg BI is finalized.



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