The leading knowledge platform for the financial technology industry
The leading 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

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.”

Related content

WEBINAR

Recorded Webinar: Best practice for Regulatory Change in 2021 and beyond

How to get regulatory change management right and avoid the risks of getting it wrong The burden of regulatory change on financial firms has never been greater, leaving compliance teams under increasing pressure to ensure that changes are reviewed and acted upon in a timely manner. Technology enhancements in this space can help, allowing firms...

BLOG

Cloud Comes to the Fore for Fails Management

By Daniel Carpenter, Head of Regulation, at Meritsoft, a Cognizant company. As financial market participants of all types await the regulator’s decision on mandatory buy-ins, preparations continue for the introduction of the new CSDR Settlement Discipline Regime. With the focus on updating systems and operational processes to meet the requirements around penalties, as a minimum,...

EVENT

Data Management Summit USA Virtual

Now in its 11th year, the Data Management Summit USA Virtual explores the shift to the new world where data is redefining the operating model and firms are seeking to unlock value via data transformation projects for enterprise gain and competitive edge.

GUIDE

Entity Data Management Handbook – Seventh Edition

Sourcing entity data and ensuring efficient and effective entity data management is a challenge for many financial institutions as volumes of data rise, more regulations require entity data in reporting, and the fight again financial crime is escalated by bad actors using increasingly sophisticated techniques to attack processes and systems. That said, based on best...