A guide for compliance teams operating in enterprise financial institutions
Surveillance for any kind of employee personal activity is always a challenge. One of the trickiest to track, and one that comes with perhaps the greatest deal of potential liability for enterprise financial firms, is political donations.
Compliance teams have to rely a great deal on voluntary disclosures to do their jobs. Sorting and sifting through this surrendered personal data to determine what's within the rules, what's outside the rules, and what requires further investigation has traditionally been a very manual, very laborious process.
With the advent of automated compliance platforms, life for compliance officers has gotten far easier in this regard, but it still pays to have some broader knowledge of the key elements to look for when putting together a compliance program. Following is a list of the top things to look for.
1. AUTOMATED PRE-CLEARING
One of the benefits of a modern compliance platform should be relief from the kind of time-consuming, mind-numbing decisions that can absorb excess amounts of a compliance officer's time and mental energy. The ability to automatically pre-clear requests is an obvious starting point.
Decisions about whether or not an employee can make a monetary contribution to a political candidate or political entity without putting an enterprise financial firm in violation of say, the SEC's Advisers Act Rule 206(4)-5, can now be made by algorithms. Ideally, employees simply log in to a web-based app, fill out a pre-clearance request form.
In addition, compliance teams can produce customized reports. And the ability to create custom employee profiles, apply donation limits to specific user groups, and set review thresholds should be a given, as well.
2. INTEGRATED SURVEILLANCE
A compliance program and associated software obviously need the capacity to surveil, often many different types of employee activity. In this case, it's political donations that need to be tracked. Look for a platform that collects and integrates data from systems across your firm. This might include HR and employee expense systems.
This cross-referencing of data makes an already robust compliance program even more robust: pinpointing high-risk employees, external contacts, and groups by examining a full spectrum of data. Putting otherwise innocuous seeming personal political activity into a larger context will help compliance teams better sort what's within the rules, what's outside the rules, and what requires further investigation.
3. WISH LIST ITEMS
If you're going for broke, and really want to max out the political donations monitoring capabilities of your compliance program, there are two additional features worth considering.
A beneficiary management capability lets you manage lists of individuals or political entities benefiting from donations made by your employees. This gives the compliance team a more complete picture, as it's able to see both sides of donations activity.
A contribution data service is a third-party feed that supplements the political donations data you've collected from within your firm. With a service that tracks other political donations made in the US, you can be even more sure your firm's donation limits aren't exceeded.