Compliance team member performing annual review

Five reasons why you need a compliance software that integrates with broker feeds

If your firm relies on paper statements or on indirect broker feeds to meet its obligations for employees’ personal accounts and transactions, there’s a better alternative. When you work with a compliance technology firm that has established direct brokerage feeds, the broker carrying the account sends electronic data files to your firm’s compliance system directly through a secure connection. Data files include the holdings and transaction activity for all of your firm’s employees’ accounts held at that broker.

Most of our competitors don’t offer solutions that integrate with direct broker feeds. More often than not, firms that consult our competitors end up having to do part of the job manually and consult indirect brokerage feeds. With integrated direct broker feeds from more than 200 brokerage firms and a robust data normalization process, ComplySci provides unrivaled information accuracy and dependability.

If you don’t know – that’s a game changer!

Here are five ways having a compliance system which integrates with direct broker feeds can benefit your firm, making the process easier, more reliable, cost-effective and secure:

1.     Offers a scalable way to ensure compliance today and in the future

Monitoring employees’ personal trading accounts and transactions by relying on indirect feeds or paper statements can be more than an exercise in frustration for compliance personnel; it can put your organization at risk. Implementing a compliance technology solution with direct brokerage feeds will give your compliance team the tools they need to effectively monitor and manage personal trading policies today and will allow your firm to continue to add personnel without materially impacting supervisory efforts for personal trading in the future.

2.     Enables your firm to spot potential issues and react quickly with an added layer of verification

With some indirect brokerage feeds and manual reporting processes, the compliance department may not see employees’ transactions until weeks after the transactions have settled. This can mean potential issues, are stale by the time they are reviewed and questioned.

In contrast, direct brokerage feeds are batched and received each night as one consolidated data file on platforms like ComplySci. A single data file from each broker also means data reported is more consistent and reliable. Being able to rely on data quality and integrity means the compliance staff doesn’t need to spend time reconciling numbers and can instead focus on transaction review.

As an added layer of verification, Undisclosed Account Reporting, a soon-to-be-released capability offered on the ComplySci platform, provides additional reporting via direct brokerage feeds to determine unreported and undisclosed accounts.

3.     Improves security and confidentiality

Cybersecurity is a major area of concern for the SEC and FINRA. The direct brokerage feed environment allows compliance personnel and employees to be more confident that personal account information is secure. System-to-system direct feeds are encrypted and don’t rely on employees’ individual login credentials.

Electronic feeds also eliminate the need for employees to produce – and for compliance departments to retain – paper account statements or manually-created transaction reports. Such manual methods require an additional level of security to ensure only authorized personnel can access the physical or electronic files. With direct brokerage feeds, user security can be defined and changed with just a few mouse clicks, which provides added peace of mind to compliance and risk offers and to employees.

4.     Enables your firm to better comply with the spirit and letter of the law

Using an automated compliance technology solution that integrates with direct broker feeds for managing personal trading allows your firm to establish its own business rules for the data you’re receiving.

Powerful analytic capabilities can highlight transactions that are outside established firm parameters so compliance personnel can review them in greater detail. Alerts, insights and configurable dashboards allow reviewers to make the most out of reported data, viewing and using transaction information as a tool rather than as a chore. Additionally, such a system makes managing potential conflict of interest easier. Your firm can leverage compliance infrastructure capabilities to automate your processes and streamline the management of personal trading, gifts and gratuities, pay-to-play, and other potential conflicts of interest, enabling your firm to better protect its reputation.

5.     Benefits employees

Using direct brokerage feeds provides a seamless experience for your employees. Once they have reported their accounts and the compliance department has requested the direct feeds, employees won’t need to worry about reporting transactions or providing physical account statements. This is just one way that the ComplySci Platform distinguishes itself from its competitors.

This is welcome news for employees who are used to providing transaction and holdings reports, sharing paper statements or uploading PDFs of their statements to the compliance department every quarter. It’s in your firm’s best interest that your employees comply with your firm’s policies and procedures. When you provide direct brokerage feeds for personal transactions, you’re making it significantly easier for them to do so.

For compliance professionals at firms without direct brokerage feeds, those charged with overseeing the firm’s personal trading policies carry an extremely heavy burden. Implementing a solution that integrates broker feeds can lighten the load for your firm’s compliance officer.

Direct feeds are the most reliable, accurate and secure way to collect and review your employees’ brokerage account data. With direct feeds you have complete control over your data, maximum visibility into the health and status of your data, and the greatest levels of security with end-to end encryption. Are you interested in learning more about the ComplySci Platform? Schedule a demo today