About a-team Marketing Services
The knowledge platform for the financial technology industry
The knowledge platform for the financial technology industry

A-Team Insight Blogs

Compliance-as-a-Service Provider Lawson Conner Adopts Acquirer IQ-EQ’s Brand Name

Subscribe to our newsletter

Lawson Conner, a UK-based regulatory hosting and outsourced compliance business, has rebranded as IQ-EQ, the name of investment funds service provider that acquired it in 2018. The rebrand of the compliance as-a-service provider comes at a time when the Financial Conduct Authority (FCA) has prioritised raising standards in the appointed representatives segment.

IQ-EQ’s acquisition added Lawson Conner’s suite of appointed representative (AR) and AIFMD services to its existing range of compliance, administration, asset and advisory services in its ongoing bid to offer a ‘one-stop-shop’ for investment funds.

Rachel Aldridge, Managing Director, Regulatory and Compliance Solutions, at IQ-EQ, says IQ-EQ incorporates a number of legacy businesses, including Lawson Connor, which together cover a wider range of functions intended to help make the life of an investment management fund easier. Lawson Connor has two FCA-regulated principal firms, Sapia Partners and G10 Capital, which offer appointed representative services.

“Our business model helps firms to get off the ground quickly because they don’t have to get their own FCA authorisation, which can take up to 12 months to complete,” Aldridge says. “We become essentially their compliance department, ensuring that the fund is in line with all current regulatory requirements and actively monitoring them to make sure that what they’re doing is good and proper. A lot of our clients are using us as a stepping stone to getting their own direct authorisation later down the line, while others are not interested in having a compliance department and are happy to outsource that responsibility to us.”

The UK’s FCA recently highlighted the need to raise standards in the AR regime as a priority. In the regulator’s business annual business plan it warned that “many principal firms have poor due diligence and oversight of their ARs,” adding that to ensure principals?and ARs are competent, financially stable and ensure fair outcomes for consumers, the FCA will be increasing its supervision to reduce the most significant?risks from ARs in wholesale markets. Earlier this year, the FCA came under fire for the effectiveness and oversight of the AR system following the collapse of Greensill Capital.

According to Aldridge, IQ-EQ’s two regulated entities take on the regulatory risk for their clients directly. “We take this extremely seriously,” she adds. “Essentially we are responsible for making sure that they are running their business in a compliant manner.”

In addition, the business also offers a product called MaxComply, an AML/KYC onboarding tool which automates a wide variety of routine and admin heavy compliance processes and workflows. “We use MaxComply to service all of our ARs but we also offer it as a standalone software service or a managed service to our clients,” says Aldridge. “What we’re trying to do is offer as many different solutions to the same problem as we can. We have a number of other compliance offerings, including compliance consulting, training, all the routine business as usual (BAU) compliance, or firms can choose to come under our regulatory umbrella.”

The impact of Brexit means that firms are also currently unclear about what the different requirements are, which can also vary from country to country, says Aldridge. “If any of our clients are looking to market to investors in different European jurisdictions, we need to look very carefully into what exactly the requirements are in each individual jurisdiction,” she adds.

In the UK, the time and complexity involved in becoming a regulated entity is also increasing, Aldridge notes, with the time it takes to go down the direct authorisation route having doubled in the past few years from six months to around 12 months currently. “However, many investment funds have also seen very positive outcomes in their business over the last 18 months, with many going for strength to strength,” she says. “It’s been a very busy time for us and the market.”

Subscribe to our newsletter

Related content

WEBINAR

Recorded Webinar: Potential and pitfalls of large language models and generative AI apps

Large language models (LLMs) and Generative AI applications are a hot topic in financial services, with vendors offering solutions, financial institutions adopting the technologies, and sceptics questioning their outcomes. That said, they are here to stay, and it may be that early adopters of Generative AI apps could gain not only operational benefits, but also...

BLOG

The Potential and Practicalities of Implementing Generative AI for Compliance

While AI has been around for 20 years or so, its time has come in capital markets with Generative AI and large language models (LLMs) able to handle vast volumes of compliance data and achieve outcomes that cannot be reached by humans. GenAI apps are not, however, a silver bullet, and compliance teams are not...

EVENT

RegTech Summit New York

Now in its 8th year, the RegTech Summit in New York will bring together the regtech ecosystem to explore how the North American capital markets financial industry can leverage technology to drive innovation, cut costs and support regulatory change.

GUIDE

Regulatory Data Handbook 2023 – Eleventh Edition

Welcome to the eleventh edition of A-Team Group’s Regulatory Data Handbook, a popular publication that covers new regulations in capital markets, tracks regulatory change, and provides advice on the data, data management and implementation requirements of more than 30 regulations across UK, European, US and Asia-Pacific capital markets. This edition of the handbook includes new...