FinScan, the Pittsburgh-based division of Innovative Systems, Inc. has released FinScan Securities adding sanctioned financial instrument screening to its AML and KYC solutions.
Screening for sanctioned securities is an increasingly challenging requirement. Data identifying ultimate beneficial ownership is difficult to source and integrate and the number of securities and entities subject to sanctions continues to grow fueled by evolving political situations in the Middle East, Eastern Europe, and Asia. As a result, firms are required to monitor vast volumes of data to stay compliant.
Executive orders in 2020 and 2021 (EO 13959 and EO 14032) extended sanctions coverage to indirect investments creating new obligations for asset managers, fund managers, index providers and the investment banks and brokerages that market the funds. Previously, buy-side firms relied on their sell-side service providers to screen their holdings to ensure they have not been issued by entities that are owned, managed by or otherwise connected to sanctioned individuals.
The capital markets sector is highly attractive to criminals due to its complex and fast-paced nature, allowing rapid and easy movement of illicit funds across borders. This environment requires an advanced, comprehensive compliance solution to ensure adherence to constantly updating sanction lists and regulatory demands.
As staying on top of regulations has become more onerous, so the penalties have become more severe with firms facing fines in excess of $1 billion for individual breaches.
“Identifying sanctioned entities in the complex web of securities, structured products, and options has traditionally been highly challenging and reliant on manual processes. Even where organizations have managed to do this, the technology has not been available to organize and manage the results,” said Steve Marshall, Director of Advisory Services at FinScan, “FinScan Securities provides a complete, streamlined workflow from data analysis and clean-up to audit trails and reporting. As a result, time is saved, and risk is reduced by eliminating the need to rely on spreadsheets or manual reviews and alleviating the burden on IT departments to develop and maintain a homegrown solution.”
FinScan Securities covers a range of jurisdictions and sanctioning authorities, including the UN, OFAC and regulators in Australia, Hong Kong, Japan, New Zealand, Singapore, the EU, the Netherlands, Switzerland, the UK, and California with further additions in the pipeline.
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