Who Needs a Robust Compliance Infrastructure?

Investment Banking

Investment Banking

Banking institutions face a regulatory environment that is continuing to change in complexity and scope. Compliance violations or failures can bring fines, regulatory penalties, consumer litigation, and far-reaching reputational harm.

With regulators’ emphasis on consumer protections only continuing to grow, banks, credit unions and other deposit institutions need compliance technology designed to help them meet their regulatory obligations and demonstrate their commitment to protecting individual consumers.

Insurance

Insurance

The regulatory compliance landscape for insurers can be difficult to navigate, especially for insurance companies and agencies operating in multiple jurisdictions. Ongoing uncertainty about proposed legislation adds another level of complexity.

Unless they want to risk regulatory actions including fines or censures, insurance organizations must develop and implement robust compliance programs and controls designed to meet their oversight obligations, ensure agents’ activities comply, and keep insurance consumers safe.

Private Equity

Private Equity

Private Equity (PE) firms are subject to an array of regulatory rules, including those governing how they raise capital, value holdings, calculate fees and expenses, and communicate with investors. Employees are subject to state and local pay-to-play regulations and must comply with other relevant federal regulatory statutes.

PE firms and compliance officers without regulatory compliance infrastructure in place could find themselves struggling to meet their obligations and facing significant fines and penalties when violations occur.

Hedge Funds

Hedge Funds

Hedge funds continue to be under the watchful eyes of regulators, intent on preventing, detecting and correcting conflicts of interest, fraud, and insider trading. It’s not just regulators paying attention; investors, wanting more than just good returns on their hedge fund investments, are increasingly seeking transparency.

Because they are subject to onerous reporting requirements by the SEC, the CFTC, and the EU, hedge funds must capture and maintain significant amounts of data. Without compliance technology solutions in place to manage these requirements, hedge funds may inadvertently find themselves in the regulators’ crosshairs.

Pension Funds

Pension Funds

Both public and private pension funds must comply with the Internal Revenue Service’s Rules, the Department of Labor’s Pension and Welfare Benefits Administration, state and local laws, and the Pension Benefit Guaranty Corporation. Understanding when, and how, ERISA and other rules apply can be nuanced and confusing.

Of course, compliance with the rules is not optional. The risks of noncompliance include sanctions, fines, and potential ERISA fiduciary exposure. Pension funds need reliable, scalable compliance programs to protect plans and their fiduciaries from risk. Implementing compliance policies, processes, and technology solutions can provide plan sponsors and plan participants with peace of mind knowing the right safeguards are in place.

Investment Managers

Investment Managers

Many investment management organizations are struggling to comply with growing investors’ expectations and regulatory requirements. Non-compliance with the rules could have serious implications for key stakeholders and the firm itself.

Given that regulatory uncertainty is not likely to lessen in the near future, firms must implement and maintain effective risk management and compliance programs that are designed to meet today’s regulations but that are also adaptable and scalable enough to adjust when the regulatory rules shift.

Registered Investment Advisers

Registered Investment Advisers

Both Federally-registered and state-registered Registered Investment Advisers (RIAs) must comply with rules and regulations designed to protect investors. One of the challenges RIAs sometimes face is that those regulations generally don’t include a great deal of specificity. Instead, RIAs are charged with implementing compliance programs and policies designed to meet the general requirements, and with testing those programs periodically to identify gaps or areas for improvement.

Implementing a solid compliance framework is key to managing proprietary and personal trading activities, safeguarding clients’ assets, managing communications with the public, avoiding potential conflicts of interest, creating books and records, ensuring privacy, and managing employees’ compliance with other firm policies and safeguards. Taking a proactive approach to regulatory compliance can also help RIAs avoid regulatory sanctions and reputational damage that could lead to a loss of client confidence.

Brokerage Firms

Brokerage Firms

Registered broker-dealers must comply with rules promulgated by the Securities and Exchange Commission (SEC) and by the Financial Industry Regulatory Authority (FINRA). Among other consumer protections, this framework of regulations requires brokerage firms to implement policies and procedures designed to address and manage potential conflicts of interest.

The penalties for brokerage firms that don’t comply with FINRA rules can range from monetary fines to expulsion from the industry. Broker-dealers can leverage compliance infrastructure
capabilities to manage personal trading, gifts & gratuities, pay-to-play, and other potential conflicts in accordance with the firm’s specific policies and procedures.

Public Corporations

Public Corporations

Public companies in any sector today can face complex corporate governance issues and disclosure requirements that can seem overwhelming, in addition to the risk of shareholder activism.

Having an actionable, efficient compliance program in place can help public corporations avoid the issues that can come from insider trading, code of conduct and ethics violations, anti- corruption policy violations, whistleblower complaints, and government investigations and enforcement actions.

Professional Services Organizations

Professional Services Organizations

Professional services firms need solid compliance programs and solutions designed to protect them from the risks they face when serving clients every day. If there is a data breach, a conflict of interest arises, or if a significant business disruption occurs and the firm doesn’t have adequate controls in place, the firm and its key stakeholders may find themselves facing significant liability risk and regulatory consequences.

In addition, firm leaders without adequate compliance structures in place will likely struggle to become and remain competitive. Taking a proactive approach and implementing robust compliance solutions can help professional services companies continue to grow even as rules and regulations change.

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