www.acuitykp.com
Open in
urlscan Pro
67.227.136.83
Public Scan
Submitted URL: https://cqdnx04.na1.hubspotlinks.com/Ctc/5D+113/cQdNX04/VWT4cn6Vg95XW87nGPJ7kwyX4W3X6sTS5bW7LrN2K0T4g3qn9gW95jsWP6lZ3lNW6qSHnQ8TDxH7V...
Effective URL: https://www.acuitykp.com/blog/investment-compliance-trends-and-best-practices/?utm_campaign=Compliance%20Newsletter&utm_m...
Submission: On March 20 via api from US — Scanned from DE
Effective URL: https://www.acuitykp.com/blog/investment-compliance-trends-and-best-practices/?utm_campaign=Compliance%20Newsletter&utm_m...
Submission: On March 20 via api from US — Scanned from DE
Form analysis 5 forms found in the DOM
GET https://www.acuitykp.com/
<form class="c-search-form" action="https://www.acuitykp.com/" method="get" data-hs-cf-bound="true">
<fieldset>
<div class="new-srch-blk-cnt">
<input type="text" class="srch-txt-new" name="s" placeholder="Type to search" value="">
<button type="submit" class="secondary-btn">Search</button>
</div>
<input type="hidden" id="_wpnonce" name="_wpnonce" value="ff192ba05e"><input type="hidden" name="_wp_http_referer"
value="/blog/investment-compliance-trends-and-best-practices/?utm_campaign=Compliance+Newsletter&utm_medium=email&_hsmi=299034906&_hsenc=p2ANqtz-_PIcp99YyeYUlSCoAhJlrq5H1SOUGZ1hC2ZWmJmqz5y_m2IjVMEF-GjF2IRvQLR72pwWpR2d-zQ9Ec1Mbz2HpnBrVKKw&utm_content=299036775&utm_source=hs_email">
</fieldset>
</form>GET https://www.acuitykp.com/
<form class="c-search-form" action="https://www.acuitykp.com/" method="get" data-hs-cf-bound="true">
<input type="text" class="srch-txt" name="s" placeholder="Type and hit enter" value="">
<input type="hidden" id="_wpnonce" name="_wpnonce" value="ff192ba05e"><input type="hidden" name="_wp_http_referer"
value="/blog/investment-compliance-trends-and-best-practices/?utm_campaign=Compliance+Newsletter&utm_medium=email&_hsmi=299034906&_hsenc=p2ANqtz-_PIcp99YyeYUlSCoAhJlrq5H1SOUGZ1hC2ZWmJmqz5y_m2IjVMEF-GjF2IRvQLR72pwWpR2d-zQ9Ec1Mbz2HpnBrVKKw&utm_content=299036775&utm_source=hs_email">
</form>GET https://www.acuitykp.com/
<form class="c-search-form" action="https://www.acuitykp.com/" method="get" data-hs-cf-bound="true">
<div class="mob-form mob-srch-txt">
<input type="text" name="s" class="" placeholder="Type and hit enter" value="">
<button class="mob-form-button" type="submit" aria-label="right"><img src="https://www.acuitykp.com/wp-content/themes/maks/images/new-right.png" alt="right" width="12" height="23" loading="lazy"></button>
</div>
<input type="hidden" id="_wpnonce" name="_wpnonce" value="ff192ba05e"><input type="hidden" name="_wp_http_referer"
value="/blog/investment-compliance-trends-and-best-practices/?utm_campaign=Compliance+Newsletter&utm_medium=email&_hsmi=299034906&_hsenc=p2ANqtz-_PIcp99YyeYUlSCoAhJlrq5H1SOUGZ1hC2ZWmJmqz5y_m2IjVMEF-GjF2IRvQLR72pwWpR2d-zQ9Ec1Mbz2HpnBrVKKw&utm_content=299036775&utm_source=hs_email">
</form>POST
<form action="" method="post" id="contact_form" data-hs-cf-bound="true">
<fieldset>
<div class="view-form clearfix">
<div class="left">
<div class="mui-textfield mui-textfield--float-label mui-textfield-01">
<textarea class="mui--is-dirty mui--is-empty" id="message_field"></textarea>
<label>Enter Comment</label>
</div>
</div>
<div class="right">
<div class="mui-textfield mui-textfield--float-label mui-textfield-01">
<input class="mui--is-dirty mui--is-empty" id="name_field" type="text" name="name_user" value="">
<label>Name</label>
</div>
<div class="mui-textfield mui-textfield--float-label mui-textfield-01">
<input class="mui--is-dirty mui--is-empty" id="email_field" type="email" value="">
<label>Email</label>
</div>
<div class="mui-textfield mui-textfield--float-label mui-textfield-01">
<input class="mui--is-dirty mui--is-empty" id="org_field" type="text" value="">
<label>Organization</label>
</div>
<div class="mui-textfield mui-textfield--float-label mui-textfield-01">
<input class="mui--is-dirty mui--is-empty captcha_class" name="captcha_code" id="captcha_id" type="text">
<label for="captcha_id">Please enter the given code</label>
</div>
<div class="mui-textfield mui-textfield--float-label mui-textfield-01 right">
<img id="captcha-image" alt="captcha code" src="https://www.acuitykp.com/captcha.php?captcha=1" loading="lazy" class="medium-zoom-image">
</div>
<input type="hidden" id="blog_post_id_val" value="29846">
</div>
</div>
<div class="view-submit">
<button type="button" id="contact-submit" class="secondary-btn">Submit</button>
</div>
</fieldset>
</form><form action="" data-hs-cf-bound="true">
<fieldset>
<div class="input-holder left">
<label for="" class="left"><img src="https://www.acuitykp.com/wp-content/themes/maks/images/green-mail.png" alt="" loading="lazy"></label>
<input type="text" id="blog_email" name="" class="left" placeholder="Type email and hit enter">
</div>
<button type="submit" id="blog_submit_button" class="right"><img src="https://www.acuitykp.com/wp-content/themes/maks/images/green-rht-arw.png" alt="" loading="lazy"></button>
</fieldset>
</form>Text Content
Acuity Knowledge Partners
* Who we serve
* Asset Managers
* Private Wealth Managers
* Hedge Funds
* Private Equity and Venture Capital Firms
* Corporate and Investment Banks
* Commercial and Regional Banks
* Specialist Advisory Firms
* Merchant Banks and Financial Intermediaries
* Consulting and Corporate Firms
* Brokerage and Trading Firms
* Market Research Firms
* Services
* Investment Banking and Advisory
* Mergers & Acquisitions
* Sector Coverage
* Equity Capital Markets (ECM)
* Debt Capital Markets (DCM)
* Leveraged Finance
* Sustainable Finance
* Ratings Advisory
* Restructuring and Debt Advisory
* Control Functions Services Support
* Syndicated Loans
* Project Finance Support
* Public Finance
* Corporate Strategy and Development
* Principal Finance and Direct Investment
* Private Capital Advisory & Placements
* Accounting Advisory
* Paralegal Services
* Valuation and Transaction Advisory
* Investment Banking Analytics
* Business Information Services (BIS)
* Presentations and Graphics (DTP)
* Islamic Finance
* Investment Research
* Equity Research
* Fixed Income and Credit Research
* Environmental, Social and Governance (ESG)
* China Research Solutions
* Forensic Analysis
* Public Finance Research
* Research Content Services
* Research Publishing
* Supervisory Analyst Review
* Research Operations
* CRM Analytics
* Financial Modelling
* Capital Market Technology Solutions
* Lending Services
SUPPORT ACROSS LOAN BOOKS
* Corporate and Commercial Lending
* Retail Lending
* Consumer Mortgage
* Commercial Real Estate
* Asset Based Lending
* Leveraged Lending
SERVICES ACROSS THE LENDING VALUE CHAIN
* Origination, Underwriting, Monitoring
* Financial Spreading COE
* Lending Operations
* Treasury Operations and Cash Management
* Trade Finance
* Digital Lending Solutions
* KYC and Client Due Diligence
* AML Transaction Monitoring
* Data Management Services
* RFP and Digital Marketing Support
* Private Markets
* Private Equity Support
* Private Credit Support
* Venture Capital Support
* Fund of Funds Support
* Private Equity Secondary Fund Support
* Real Estate Fund Support
* Infrastructure Fund Support
* Portfolio Management and Fund Operations
* ESG support for Private Markets
* Investment Compliance
* Capital Market Technology Solutions
* Consulting and Corporates
FUNCTIONAL COVERAGE
* Strategy Research
* Corporate Finance & M&A
* Corporate Restructuring and Turnaround
* Market and Competitive Intelligence
* Sales and Marketing Strategy
* Procurement and Supplier Management
* Business Content & Corporate Communications
* Market Research and Insights
* Research Publishing
* Library Services(BIS)/ Knowledge Management
SECTOR COVERAGE
* Energy and Utilities
* Technology, Media, and Telecom (TMT)
* Life Sciences and Pharmaceutical
* Healthcare
* Fintech
* Semiconductors
* Metals and Mining
* Automotive Industry
* Industrial and Manufacturing
* Retail and CPG
* Specialised Solutions
* Portfolio Research and Operations
* Model Risk Management
* Structured Finance Services
* Derivatives Modeling
* Index Solutions
* Macroeconomic, FX and Commodity Research
* Bespoke Middle Office Operations Services
* Data Management Services
* Capital Market Technology Solutions
* Quantitative Research
* Financial Marketing services
* Financial Marketing Services
* Consultant Database Updates
* RFP Support
* Fund Factsheets and Marketing Material
* Digital Marketing Solutions
* Client Reporting
* Investment and Fund Commentary
* Seismic Support Solutions
* Marketing and Digital Solutions for Wealth Managers
* RFP Support To ESG Data & Analytics Firms
* Presales and Marketing Support for Commercial Banks
* Client Onboarding support
* Capital Market Technology Solutions
* Compliance Support
* Investment Compliance
* KYC and Client Due Diligence
* Corporate Compliance
* Forensic Compliance
* AML Transaction Monitoring
* Capital Market Technology Solutions
* Technology
* Services
* Tech Platform
* Our Impact
* Resources
* Blog
* Podcast
* Video Gallery
* Insights
* Newsletters
* Playbooks
* Webinars
* Whitepapers
* Events
X
Search
* About Us
* News Room
* Media Coverage
* Press Release
* Awards & Recognition
* Videos
* Blog
* Careers
* Career Home
* Search Jobs
* Contact Us
* EN
* CN
*
(RE)IMAGINE
The Official Blog of Acuity Knowledge Partners
INVESTMENT COMPLIANCE – WHY NEEDED, TRENDS AND BEST PRACTICES
*
*
Download Blog
Published on February 2, 2024 by Ranjith Poojary and Sandeep Khandelwal
What is investment compliance?
Investment compliance (IC) is an important aspect of portfolio management.
Portfolio managers (PMs) must ensure that their portfolios comply with the
regulatory requirements and policies of particular committees and clients in
accordance with investment agreements.
Why asset management firms need to monitor investment compliance
Proactive monitoring is crucial to ensure managers keep abreast of the evolving
regulatory guidelines in order to mitigate risk and avoid penalties and
reputational loss. Organisations often update their policies, and managers
should be diligent about staying on top of these changes and their impact on
accounting practices. When a violation is identified, it should be rectified
within the stipulated timeframe; this would reduce the financial and legal
consequences for both investment managers and clients.
Recent data shows that the number of investment advisors has grown by about 50%
over the past 10 years. Investment managers from international asset management
companies work with investors from a number of countries. Investments in these
countries are governed by different regulatory bodies and local laws. To be
compliant with these regulations and laws, investment managers should have
sufficient knowledge of regional regulation.
Despite their best efforts, asset management companies face significant
pressure. Recent developments in the investment sector and regulators’ efforts
to enforce policies have made the compliance environment more challenging, and
monitoring compliance is key to navigating this.
The need for investment compliance
The following illustrates what compliance involves.
The 2008 financial crisis led to an increase in regulatory scrutiny. The role of
the compliance department shifted from providing advice to active risk
management and monitoring. Compliance departments are now expected to provide
practical perspectives on translating regulations into operational requirements.
The role of investment compliance is not only to ensure that a business is
compliant with external regulations and client mandates, but also to maintain
internal controls and standards. In the financial services sector, compliance
departments ensure that regulatory objectives are met to protect investors and
that markets are fair, efficient and transparent.
Investment compliance mainly relates to pre-trade, post-trade and end-of-day
batch monitoring, along with account management functions. The investment
compliance function not only provides advisory solutions for compliance
breaches, but also notifies PMs of issues that require immediate attention.
Major trends in investment compliance
Amid the rapid growth of the compliance sector and constant change in
regulations, new technologies and tools are being developed to streamline the
process.
We list some compliance-related trends in the financial sector below:
1. Sanctions
A number of countries have imposed sanctions on Russia and Belarus since the
start of the Russia-Ukraine war. There are also sanctions on countries such as
Iran and Sudan and Chinese military companies, directly prohibiting investing in
their securities. Organisations should be vigilant enough to ensure that their
clients are protected from exposure to such sanctions.
2. ESG
Environmental, social and governance (ESG)-related investments are increasing,
leading to companies becoming more conscious about their impact on the
environment and society and starting to offer ESG-focused products.
3. Due diligence
Enhanced due diligence plays an important role in identifying money laundering
and fraud and in reviewing the policies and procedures of an organisation. The
higher risk associated with sanctioned entities necessitates additional checks,
including advanced searches, transaction monitoring and fund verification and
generating intelligence reports on the customer or business owner.
4. Technological advancements
Seventy-six percent of the compliance managers surveyed say they manually scan
regulatory websites to track changes and assess the impact on their
organisations, according to the MetricStream State of Compliance Survey Report
2021. Technological advancements and the adoption of machine learning have led
to an increase in the development of in-house compliance tools to automate the
different investment compliance functions.
5. Fines and penalties
The US Securities and Exchange Commission (SEC) imposed a record-breaking
USD6.4bn in penalties and disgorgement in 2022. Organisations could lose
millions in revenue due to a single non-compliance event. Organisations spend
USD5.47m on compliance compared to an average of USD14.82m for non-compliance
(source: GlobalScape).
Best practices for investment compliance
Organisations face challenges in day-to-day operations while monitoring
investment compliance. Adhering to best practices would reduce operational
inefficiency and risk of non-compliance, and enhance the effectiveness of the
overall compliance structure.
* Address every alert that is non-compliant and conduct a root-cause analysis
before approving the alert. Save all related documents and correspondence for
future reference.
* Notify the PM of a red flag as a potential violation, so the necessary action
could be taken to ensure that the fund remains compliant with the prescribed
guidelines.
* Reduce the number of false alerts by identifying rule-optimisation items or
conducting a standard review of the restriction while coding in the system.
* Make use of automated tools and formulated sheets where required to increase
efficiency and reduce human error in monitoring. Focus on developing in-house
tools to automate the account management process.
* When launching a new account, interpret guidelines from the investment policy
statement/prospectus properly and create grids and onboarding checklists. A
secondary standard review would check for omissions and mistakes.
How Acuity Knowledge Partners can help
We are pioneers in investment services offerings. We create tailor-made dynamic
functions with a robust, responsive and proficient control framework and process
delivery. Our highly experienced tool-agnostic team provides support
in investment compliance, trade surveillance and corporate, forensic and crime
compliance. These services are supported by our proprietary suite of Business
Excellence and Automation Tools (BEAT), which offer domain-specific contextual
technology.
Our teams of experts have a unique combination of skillsets. They have extensive
experience in order management/compliance systems such as Bloomberg AIM, Ion’s
Latent Zero Sentinel, Charles River Database (CRIMS), LDC, ThinkFolio and
BlackRock’s Aladdin, BTCA and SMARTS.
Sources:
* Global risk and compliance report 2021 | Refinitiv
* SEC.gov | SEC Announces Enforcement Results for FY22
* State of Compliance Survey Report 2021 (metricstream.com)
* Why Investment Compliance Monitoring is Critical | Finreg E (finreg-e.com)
* Investopedia
Tags:
account management functions Asset Management compliance department due
dilligence Investment Advisors Investment Compliance Monitoring
--------------------------------------------------------------------------------
WHAT'S YOUR VIEW?
Enter Comment
Name
Email
Organization
Please enter the given code
Submit
THANK YOU FOR SHARING YOUR COMMENTS
Share this on
--------------------------------------------------------------------------------
ABOUT THE AUTHORS
Ranjith Poojary
Know More
Ranjith Poojary has over 9 years total work experience, and is currently working
as an investment compliance specialist in pre-trade, post-trade monitoring and
rule coding. He has worked for firms including Oracle & State Street Syntel. His
expertise spans across the Portfolio risk analytics and investment compliance
sector. At Acuity Knowledge Partners he is working as a Delivery Lead supporting
both post & pre-trade compliance services. Ranjith has done his MBA from Acharya
Institute of Technology, Bangalore.
Sandeep Khandelwal
Know More
Sandeep has overall 14+ years of experience and is currently working as
Investment compliance specialist in pre trade & post trade monitoring. He has
worked with various firms including BNY Mellon Pershing, Standard Chartered Bank
& HDFC Bank. His expertise spans across Retail Banking operations, Capital
Market Operations & Compliance monitoring. At Acuity Knowledge Partners, he is
working as a Delivery lead supporting both post & pre-trade compliance services.
He is a MBA graduate in Finance from GRD College of Management, Coimbatore.
Other Related Articles More articles by this author Other Authors
Blog
INSIDER-TRADING REGULATION AND COMPLIANCE IN INV....
Introduction Insider trading is a financial practice that has gained significant
attentio....Read More
Compliance , Insider trading , insider trading regulations
Blog
ENSURING DATA SECURITY AND COMPLIANCE WITH CONFI....
In today's digital age, data security and compliance are paramount concerns for
businesses....Read More
Compliance , Confirmit , Data security
Blog
NAVIGATING GLOBAL COMPLIANCE CHALLENGES WITH ACU....
In the fast-paced world of finance, with constantly evolving regulations and
high stakes, ....Read More
AML , Compliance , compliance solutions
Load More
LIKE THE WAY WE THINK?
Next time we post something new, we'll send it to your inbox
X
Contact
Us
Resources
Whitepapers Insights Blogs Playbooks Video Gallery Webinars Newsletters Events
ESG Newsletter
Products
FolioSure – Portfolio Monitoring CovenantPulse – Covenant Monitoring Edge –
Consultant Database Updates TombstoneHub – Automated IB Credentials FilingsHub –
Access SEC Filings AdInspect – Marketing Compliance ProfileHub – Automate
Company Profiles Aura – Financial Data Extractor Automated Financial Model
Builder BEATFlow – Workflow Management
Client Segments
Asset Managers Hedge Funds Private Wealth Management Services Brokerages and
Trading Firms Private Equity and Venture Capital Firms Corporate and Investment
Banks Specialist Advisory Firms Commercial and Regional Banks Consulting and
Corporate Firms Market Research Firms
News
Media coverage Press releases Market Insights
Acuity Knowledge Partners (UK) Limited, 4th Floor, Martin House, 5 Martin Lane,
London EC4R 0DP | +44 207550 4499 | contact@acuitykp.com
Copyright © 2024 Acuity Knowledge Partners. All Rights Reserved
Terms of Use Privacy Policy Sitemap
By clicking “Accept All Cookies”, you agree to the storing of cookies on your
device to enhance site navigation, analyze site usage, and assist in our
marketing efforts.
Cookies Settings Reject All Accept All Cookies
PRIVACY PREFERENCE CENTER
* YOUR PRIVACY
* PERFORMANCE COOKIES
* STRICTLY NECESSARY COOKIES
* TARGETING COOKIES
* FUNCTIONAL COOKIES
YOUR PRIVACY
When you visit any website, it may store or retrieve information on your
browser, mostly in the form of cookies. This information might be about you,
your preferences or your device and is mostly used to make the site work as you
expect it to. The information does not usually directly identify you, but it can
give you a more personalized web experience. Because we respect your right to
privacy, you can choose not to allow some types of cookies. Click on the
different category headings to find out more and change our default settings.
However, blocking some types of cookies may impact your experience of the site
and the services we are able to offer.
More information
PERFORMANCE COOKIES
Performance Cookies
These cookies allow us to count visits and traffic sources so we can measure and
improve the performance of our site. They help us to know which pages are the
most and least popular and see how visitors move around the site. All
information these cookies collect is aggregated and therefore anonymous. If you
do not allow these cookies we will not know when you have visited our site, and
will not be able to monitor its performance.
STRICTLY NECESSARY COOKIES
Always Active
These cookies are necessary for the website to function and cannot be switched
off in our systems. They are usually only set in response to actions made by you
which amount to a request for services, such as setting your privacy
preferences, logging in or filling in forms. You can set your browser to block
or alert you about these cookies, but some parts of the site will not then work.
These cookies do not store any personally identifiable information.
TARGETING COOKIES
Targeting Cookies
These cookies may be set through our site by our advertising partners. They may
be used by those companies to build a profile of your interests and show you
relevant adverts on other sites. They do not store directly personal
information, but are based on uniquely identifying your browser and internet
device. If you do not allow these cookies, you will experience less targeted
advertising.
FUNCTIONAL COOKIES
Functional Cookies
These cookies enable the website to provide enhanced functionality and
personalisation. They may be set by us or by third party providers whose
services we have added to our pages. If you do not allow these cookies then some
or all of these services may not function properly.
Back Button
COOKIE LIST
Filter Button
Consent Leg.Interest
checkbox label label
checkbox label label
checkbox label label
Clear
checkbox label label
Apply Cancel
Confirm My Choices
Reject All Allow All