Automated compliance systems
| Published date | 01 January 1999 |
| Pages | 48-56 |
| Date | 01 January 1999 |
| DOI | https://doi.org/10.1108/eb024996 |
| Author | Fredda E. Ackerman,R. Darrell Mounts,David U. Thomas |
| Subject Matter | Accounting & finance |
Journal of Financial Regulation and Compliance Volume 7 Number 1
Automated compliance systems
Fredda E. Ackerman,* R. Darrell Mounts and David U. Thomas
Received: 26th May, 1998
*décalog, 75-101 Federal Street, Suite 700, Boston, Massachusetts 02110; tel: +1 617-747-5516;
fax: +1 617-747-5580.
Fredda E. Ackermann is worldwide pro-
duct manager at décalog, Inc. where she
is responsible for development and design
of standalone pre- and post-trade compli-
ance modules. Prior to joining décalog,
she was vice president, global compliance
product at Merrin Financial where she was
responsible for product management of
pre-
and post-trade compliance products
and portfolio modelling products. She has
15 years' experience in the compliance
industry and has served as compliance
officer for investment management com-
plexes.
R. Darrell Mounts is a partner at Kirkpa-
trick & Lockhart LLP in Washington, DC.
He received his JD from the College of
William and Mary in 1988 and a Diploma
in International Law from the University of
Manchester in 1987. His practice princi-
pally focuses on investment company and
investment management matters. He regu-
larly counsels clients on compliance
issues and assists clients in developing
compliance programmes.
David U. Thomas is an associate at
Kirk-
patrick & Lockhart LLP. He received his
JD from the University of Virginia in 1989.
ABSTRACT
In recent years, investment management compa-
nies and other financial service entities have
placed an increasing emphasis on strengthening
their compliance departments and systems. Fac-
tors contributing to this heightened emphasis on
compliance include the
globalisation
and growth
of the financial services industry; the develop-
ment of new and more complex financial instru-
ments;
increased
scrutiny, higher
standards,
and
tougher
sanctions
from regulators; and several
high-profile failures that resulted, at least in
part, from inadequate compliance. To meet the
heightened demands placed on compliance per-
sonnel, most investment managers have, to a
degree utilised advances in technology to ease
the burdens and to improve overall compliance.
One of
the
main uses of
technology
has been to
monitor compliance of securities transactions
with regulatory and client-imposed investment
requirements and limitations prior to the execu-
tion of the transactions (so-called 'pre-trade
compliance'). This paper examines automated
pre-trade compliance systems, focusing on the
reasons such systems are
needed,
the types of
systems that are available and the benefits and
limitations of such systems.
BACKGROUND
Globalisation and the complexity of
compliance
Over the past few decades, economies of
countries around the world have become
more interdependent. The recent, and
ongoing, currency crisis in Asia provides
only the latest reminder that events in
other countries or regions of the world
may dramatically affect the fortunes of
companies in other countries and even the
entire economy of other countries. As
Journal of Financial Regulation
and Compliance, Vol. 7, No 1,
1999, pp. 48-56
© Henry Stewart Publications,
1358-1988
Page 48
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