When it comes to personal account dealings or employee trades, having accurate data is the most essential element to ensuring compliance. Without it, you will likely struggle to monitor employee trades and ensure compliance with your financial advisory firm’s policies and procedures.
In this worst cases, this can leave you open to potential fines and penalties.
So, how do you ensure accurate data is fed into your regulatory compliance system, tracking all employee trades against preclearance requests? Direct broker feeds.
The benefits of direct broker feeds in accurately tracking personal account dealing activity
In firms without direct brokerage feeds, those responsible for overseeing personal trading policies face a significant burden. Verifying the receipt of statements for every account on a quarterly basis or ensuring the proper functioning of indirect feeds can be time-consuming and frustrating, often requiring follow-up actions. By using direct broker feeds, the compliance department eliminates the need to spend time and resources on obtaining copies of employees’ account statements or requesting login credentials.
Manually reviewing reported or received data from indirect feeds carries a considerable risk of overlooking or disregarding information inappropriately. While some risk still exists with direct brokerage feeds, it is far less likely.
Identify potential issues with personal account dealings and respond quickly
With certain indirect brokerage feeds or manual reporting processes, the compliance department may not become aware of employees’ transactions until weeks after they have been settled. This delay means that any potential issues, if present, become outdated by the time they are reviewed and addressed.
In contrast, direct brokerage feeds are received as one consolidated data file each night. Having a single data file from each broker ensures more consistent and reliable data reporting. Relying on data quality and integrity allows the compliance staff to avoid spending time reconciling numbers and instead focus on transaction review.
Beyond compliance: Prioritizing security and confidentiality
The use of direct brokerage feeds creates a more secure environment for personal account information, providing increased confidence for compliance personnel and employees. System-to-system direct feeds are encrypted and do not rely on employees’ individual login credentials.
Electronic feeds also eliminate the need for employees to produce (and compliance departments to retain) paper account statements or manually created transaction reports. These manual methods require additional security measures to ensure that only authorized personnel can access the physical or electronic files.
With direct brokerage feeds integrated into a compliance technology platform, user security can be easily defined and modified with a few mouse clicks. This provides added peace of mind for compliance and risk officers as well as employees.
Working with ComplySci: The benefit of 300+ direct broker feeds
The ComplySci platform is supported by one of the largest global networks of direct broker feeds, which has helped over 7,000 of our clients effectively and accurately track personal account dealings against firm trade policies and procedures.
Ready to see how we can power your compliance program with 300+ direct broker feeds? Let’s talk.