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SEI Launches Global Regulatory, Compliance Platform

Tom Burroughes Group Editor 15 September 2015

SEI Launches Global Regulatory, Compliance Platform

With no end in sight to regulatory growth, the US-headquartered firm has brought out a new platform for wealth managers dealing with issues ranging from FATCA to anti-money laundering rules.

SEI, the US investment and technology company serving wealth managers and financial firms, has launched a global regulatory and compliance platform.

The platform centralises an investment firm’s regulatory and compliance functions across investment vehicles, products, and jurisdictions, the company said in a statement today.

“For years, investment managers have dealt with regulatory compliance in a reactive and siloed way, focusing on one product type, regulator, or regulatory regime at a time. But that approach is inefficient and error-prone, poses risks of non-compliance, and can hamper a firm’s ability to grow into new products and markets,” Jim Warren, head of solutions strategy and development for SEI’s investment manager services division.

The platform is designed to be a “standalone solution” so that it is not confined to clients of SEI’s operating services. SEI said it will import data for non-client firms, allowing them to take advantage of the platform regardless of where their fund accounting and administration functions are serviced.

The launch is among a raft of launches by firms of technology offerings for wealth managers dealing with regulatory change that policymakers have pushed through since the 2008 financial crisis. SEI, in a recent white paper called Evolving in the New Operational Frontier, said regulatory costs and pressures are among the top business issues asset managers face. Additionally, a recent McKinsey & Company benchmarking study of more than 300 institutional participants found that their compliance-related costs increased by an average of 12 per cent annually between 2007 and 2014. The McKinsey study also pegged the current total costs of compliance at more than $3 billion annually for traditional firms. Additionally, a 2013 KPMG hedge fund survey found their annual compliance costs to total another $3 billion a year.

How it is put together
The components of the new SEI platform include an inventory of regulations in the places where an investment manager operates; it gives compliance programme assessment and monitoring against the evolving regulatory inventory; there is a management framework and toolkit for centralised oversight of compliance activities firm-wide.

Other features include automated regulatory filings; investor compliance monitoring, tracking investor attributes linked with satisfying laws to combat money laundering; enhanced due diligence for tax laws such as the US FATCA legislation and equivalents. There is also portfolio monitoring and risk analysis to ensure managers obey regulations as well as their internal guidelines.

Another function is that the platform gives support for chief compliance officers, such as help in preparing for regulatory examinations, annual compliance reviews and help from experts at SEI.

“Our regulatory analysis shows that investment firms are subject to nearly 500 financial regulators, exchanges, and industry groups. The continual escalation of regulatory rules and reporting requirements greatly increases the demands on information systems. It also compounds the risks of non-compliance as well as executives’ personal liability,” SEI’s Warren said.


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