Cost of Compliance Continues to Climb
Fraud never goes away.
But how does any firm know that its funds are being used to launder ill-gotten gains or manipulate markets?
Here are approaches that top executives at top firms say they take, according to the 2012 Money Management Executive regulatory outlook survey.
- Account registration review
- Background checks for new accounts; Daily supervisory reviews of all trade activity; Email monitoring; system alerts established for various types of trading activity; Compliance training throughout the year.
- Risk team which electronically watches portfolios for unintended bets
- We require three separate individuals to be involved before a trade can be fully executed and all trades appear on the main blotter, which is viewable by all portfolio managers and traders.
- Employees are prohibited from transacting in securities held in any of our strategies.
- Increased electronic oversight, chief risk officer oversight
- Mulit-layered authentication
- Trader's lines are recorded; tapes are reviewed and kept for one year.
- Segregation of duties, substantial monitoring by management, internal audit, department and fund compliance staff, external auditors, controls on cash handling and transaction approvals
- Electronic processes and oversight committees
- Constant vigilance
