About a-team Marketing Services

RegTech Insight Brief

RegGenome Launches GenAI-Optimised Reg-Data Repository

RegGenome, a spin-out from the University of Cambridge, has launched an enriched regulatory data repository powered by Generative Artificial Intelligence (GenAI). This solution aims to address the increasing regulatory costs and complexities faced by firms by leveraging advanced AI technologies for regulatory operations and compliance management.

A study by Accenture indicates that while 93% of compliance leaders see AI as a simplifier of compliance processes, 90% anticipate a 30% increase in compliance costs over the next two years due to traditional, labor-intensive approaches. RegGenome’s new service provides a jurisdiction-agnostic repository of rich, descriptive, and inferential metadata optimized for GenAI algorithms, facilitating the identification, interrogation, presentation, and management of regulations.

“Our GenAI-optimised data is vital for any firm investing in modernising its data infrastructure and adopting AI. As a data-only provider, we can facilitate the creation of a central regulatory data set that can feed multiple internal use cases. By adopting our data, organisations are well-positioned to leverage the transformative potential of AI,” said Chief Operating Officer Mark Johnston.

RegGenome uses a universal information structure to organize and standardize regulations, operationalizing documentation from any authority in any language. This structure is built on provenance and regulatory standards reviewed by experts at the University of Cambridge, ensuring data integrity, reliability, and relevance. The GenAI-optimized data supports the development of standards-based solutions that enhance the capabilities of foundational large language models (LLMs), enabling reliable management of regulatory changes, policy impact assessments, information retrieval, query responses, and document summarization.

“With flexible delivery methods, our data integrates into any existing application or tool, maintaining continuity with current business operations. We meet you where you are, and that is the type of freedom customers get from a pure data-only provider,” added Head of Product Jonny Scurr.

RegGenome’s data empowers organizations to conduct granular searches, receive timely updates via custom alerts, identify common regulatory obligations across jurisdictions, and efficiently route relevant regulations to appropriate teams. This foundational dataset promises to enhance existing systems and prepares organizations for the evolving regulatory environment.

ESMA Good Practices Statement Hides a Warning on Pre-Close Calls

ESMA recently published a statement titled Good practices in relation to pre-close calls. The statement was prompted by media reports and verification by National Competent Authorities (NCAs) of a link between pre-close calls between issuers and analysts and subsequent volatility, in some cases raising suspicion about possible unlawful disclosure of inside information. 

It should be noted that subsequent investigations of these apparent links didn’t reveal any violation of the Market Abuse Regulation (MAR). 

“Pre-close calls” are communication sessions between an issuer and an analyst or group of analysts who generate research, forecasts, and recommendations related to the issuer’s financial instruments for their clients.  

These “pre-close calls” usually take place immediately before the black-out periods preceding an interim or a year-end financial report during which issuers refrain from providing any additional information or updates. 

The purpose of the ESMA statement is to remind issuers of the legislative framework applicable to pre-close calls and to identify good practices to which issuers should pay particular attention when engaging in such calls. 

Pre-close calls should only provide non-inside information and, whenever inside information is accidentally disclosed during a pre-close call, MAR requires restoration of information parity by making the disclosed information public immediately. 

The statement also includes a collection of best practices observed by National Competent Authorities (NCAs): 

  • Assessment of Disclosed Information: Prior to calls, issuers should thoroughly assess the information to ensure it is non-inside information. 
  • Public Disclosure: Announce upcoming pre-close calls with details, date, place, topics, and participants via the issuer’s website. 
  • Simultaneous Material Availability: Make the materials used in calls (e.g., slides, notes) available on the issuer’s website. 
  • Recording Calls: Record the calls and provide recordings to NCAs upon request. 
  • Keeping Records: Maintain and publish records of disclosed information on the issuer’s website for public access. 

ESMA and the NCAs consider that following these good practices could reduce the risk of unlawful disclosure of inside information. 

Reactions to the Statement 

Responses from the Trade and e-Comms surveillance vendors emphasise the need for transparency and fairness in maintaining orderly markets that can be trusted.  

Matt Smith, CEO at surveillance solutions provider SteelEye, is well positioned to comment on transparency gaps in the surveillance ecosystem. “ESMA’s statement is a stark reminder that without an emphasis on transparency during pre-close calls, a watchdog crackdown could well be on the horizon. Markets need to remain inclusive and democratic, ensuring everyone has the right to participate with equal knowledge and to make informed decisions. When a select few have unfair access to sensitive information, this of course influences the market – something regulators are evidently keeping a closer eye on.” 

Smith’s concerns are well founded given the recent enforcement actions for shortfalls in e-Comms surveillance monitoring. 

Oliver Blower, CEO of VoxSmart takes a more pragmatic view calling for regulatory clarity and rules instead of the grey areas surrounding issuer pre-close calls. “It is all very well ESMA trying to keep everyone honest, but these are guidelines, not legislation. Clear rules and transparency are key to keeping our markets trustworthy and fair – and this is what most market participants want as well. 

The grey area is when exactly does activity of this nature become a disclosable event to the wider market? At the end of the day, if there is a suspiciously high share price immediately after an analyst call, any regulator is going to need to dig into not only the intricate details behind the trades, but also whether the bank in question provided the full and proper disclosures in a timely manner.” 

Both Smith and Blower emphasize the importance of transparency and clarity in the management of pre-close calls to maintain market integrity and fairness. They share a concern for preventing unlawful disclosures and ensuring that all market participants have equal access to information. Both agree that well-defined practices and guidelines are crucial for fostering trust and inclusivity in the financial markets, aligning with the overarching goal of regulatory bodies to uphold a fair and transparent trading environment. 

Saifr Extends AI-Powered Marcomms Content Compliance Solution

Saifr has extended the functionality of its suite of marketing compliance capabilities to detect comparison, ranking, and rating claims; performance claims made about investment options; testimonials; and references to tax-free or tax-exempt income. Additionally, expanded AI models for marketing optimisation can determine grade-level readability. 

These features join Saifr’s existing compliance suite, which flags promissory, misleading, exaggerated, unwarranted, or ‘unfair and balanced’ text; detects non-compliant images; explains the risk of flagged content; suggests more compliant alternate phrasing; and recommends disclosures.  

Saifr offers multiple ways to access its AI: SaifrReview (a collaborative enterprise workflow solution), SaifrScan (software add-ins, such as Microsoft Word ), and APIs. 

“These offerings are designed to help financial institutions more easily comply with regulations including FINRA 2210, SEC 482, SEC Modernized Marketing Rule, and similar rules, and effectively market to their target audiences,” said Vall Herard, CEO of Saifr. “With the help of AI, Saifr enables compliance and marketing teams to more accurately mitigate risk while developing marketing-optimized, compliant content up to 10x faster.” 

A-Team Group recently featured Saifr following an interview with CEO Herrard. The interview revealed how Saifr’s AI-powered solutions have evolved since the company started in 2020 and offered a glimpse of what might be coming.  

Saifr is a multiple A-Team Group Awards winner and can claim: 

  • Most Innovative AI in Regulatory Compliance Initiatives. A-Team Group Innovation Awards 2024 
  • Best AI Solution for Regulatory Compliance. A-Team Group RegTech Insight Awards USA 2023.  

FinScan Launches Sanctioned Securities Screening

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.

Droit and FINBOURNE Partner to Produce Position Reporting Solution

Droit, a provider of computational law and regulation, is partnering FINBOURNE Technology, a provider of cloud-based investment data management software, to deliver an end-to-end position reporting solution. The integration embeds Droit’s Position Reporting product that delivers determination of reporting obligations based on consensus interpretations of requirements from Endoxa, a consortium of six global financial institutions, into FINBOURNE’s financial data management platform LUSID. This enables sell-side and buy-side institutions to manage disclosure obligations for long, short and takeover panel reporting.

The unified approach also ensures consistency around complex regulatory interpretations, regulatory clarity and accuracy of reporting. As part of the joint solution, Droit translates and processes detailed guidelines from all major global jurisdictions, automating the decision-making process for shareholder disclosure reporting eligibility. For complete accountability, a traceable audit record is generated for each evaluated position.

Bloomberg Releases Tool for Sustainable Investment Screening

Bloomberg has released a tool that helps investors assess portfolios, funds and indices based on sustainability criteria and thresholds customised by the user. Available on the Bloomberg Terminal and based on the company’s ESG data, the solution facilitates a transparent screening process and can be used for both making investment decisions and to help clients with regulatory compliance.

Users can input their investment preferences by selecting from a wide range of criteria and calibrating precise thresholds from three categories: sustainability targets, exclusion or ‘no harm’ criteria, and good governance requirements. The tool then calculates a percentage figure that shows how much of a portfolio, fund or index is aligned with the user’s criteria and provides a detailed list of all holdings to quickly detect any outliers.

Investors can also use the tool to check, based on their own definitions, if funds align with regulatory obligations including the EU’s MiFID II suitability rules and Sustainable Finance Disclosure Regulation (SFDR), the United Arab Emirates’ sustainable finance framework, the UK FCA’s forthcoming sustainability disclosure requirements, and future SEC guidance on ESG disclosures and fund labelling.

ZERO13 Collaborates with Industry Leaders to Launch First Digital Carbon Credit Platform for Renewable Energy

ZERO13, the GMEX Group company operating a carbon exchange, registry and aggregation hub ecosystem, has partnered with Decarb.earth, CarbonCX, and XTCC to introduce a digital platform for end-to-end digitally measured, reported and verified carbon credit distribution, trading, and settlement for renewable energy projects

ZERO13 is a cloud-native, infrastructure-agnostic, decentralised platform that streamlines workflows across various exchanges, participants, custodians, registries, and climate fintech services, integrating digital monitoring, reporting, and verification to provide real-time checks on carbon offset supplies and project provenance. It supports end-to-end distribution across diverse blockchains and APIs, facilitating effective trading and settlement, and overcoming the limitations of the traditional voluntary carbon market (VCM).

R3 and Quant Selected to Develop Prototype for UK’s Regulated Liability Network

R3 and Quant have been chosen to create the technology prototype for the UK’s Regulated Liability Network (RLN) experimentation phase, an initiative led by UK Finance and supported by EY. This project aims to establish a unified platform facilitating various financial transactions using tokenised and traditional commercial bank deposits. The RLN will serve as a central innovation hub for digital transactions, with confirmed participants including Barclays, HSBC, Citi and Visa, among others. R3 will leverage its Corda platform for shared ledger capabilities, while Quant will enhance money interoperability through its Overledger platform.

The collaboration underscores the strategic aims of R3 and Quant in addressing the complexities of regulated financial environments through advanced ledger and API technologies. The prototype will explore multiple use cases across retail and wholesale payments, including ecommerce and bond issuance, supported by technology partners such as DXC Technology and Coadjute.

T+1 and Voice Analytics to Feature at Symphony Innovate 2024 (NYC)

A-Team Group recently caught up with Ben Chrnelich, President and CFO of Symphony Communications to discuss how their Enterprise Collaboration and Workflow platform is helping firms prepare for T+1 – which goes live on May 28, and the significant uptick in e-comms messaging volume over their Federated Communications offerings. 

Both of these core offerings will be in focus at Symphony Innovate 2024 in NYC on April 18th.   

The Evolution of Operations Workflows will feature Live Demos from DTCC and Symphony with representation from Citi, JP Morgan, UBS, and Well Fargo.

Bringing Insights to Trader Voice will highlight Cloud9 Transcription and Voice Analytics in Action with representation from Goldman Sachs and Capital One. 

As Chrnelich recalls; “Going into 2024, there were signs that capital flows were opening up. People were looking to invest in areas around RegTech and compliance technology. The seriousness of industry fines related to off-channel communication was definitely being acknowledged and addressed by the industry and regulated participants. We’ve seen the messaging volume on our federated offerings grow by almost 400% since Q1 of 2023.” 

Symphony Communications started in 2014 as an industry-backed consortium, to deliver a messaging platform for data security and compliance, and an open architecture platform to facilitate real-time cross-company and inter-company communication. The founding consortium members included BofA Merrill Lynch, BNY Mellon, BlackRock, Citadel, Citi, Credit Suisse, Deutsche Bank, Goldman Sachs, Jefferies, JPMorgan, Maverick, Morgan Stanley, Nomura and Wells Fargo. Today, the company’s solutions support over half a million users, servicing more than 1,000 institutions.

Corporater Unveils Business Process Management for Enhanced GRC and Performance Management (GPRC)

Corporater, a global leader in software solutions for Governance, Risk, and Compliance (GRC) and Performance Management (jointly addressed as GPRC), is proud to announce the launch of a new Business Process Management Engine.  

First introduced in the Nordic market, this significant functional addition is now available globally. 

Digital GRC programs are being challenged by evolving regulatory requirements such as ESG, Cybersecurity, and DORA/operational resilience. At the same time, market innovations in cross-product and cross-border trading activity add to business process complexity. The convergence of governance, accountability, audit, and resilience sets the stage for Business Process Management (BPM) as a foundational and vital tool for the successful digital transformation of an organization’s GRC program. 

The new Business Process Management Engine (BPME) complements a comprehensive toolbox of existing features including risk quantification, Monte Carlo simulations, a flexible Forms & Survey engine, risk aggregation, and AI assistance that collectively enable enterprises to implement a holistic, easy-to-use, enterprise-wide GRC program. 

The new Corporater BPME offers a complete design-to-execution functionality delivering auditable, measurable business processes that comply with regulatory requirements, increase operational efficiency, align with organizational objectives, and support AI-powered integration with relevant GRC and Performance Management data. The net effect is an uplift in organizational agility, resilience, and overall business performance. 

“With the enhanced Business Process Management Engine, Corporater continues to set the standard for integrated enterprise GRC and Performance Management solutions,” said Owe Lie-Bjelland, GPRC Director at Corporater. “We aim to empower organizations to not only manage risks and compliance effectively across the enterprise but also enhance overall business performance through an integrated business-wide GRC program.”