With the implementation of the Dodd–Frank Wall Street Reform and Consumer Protection Act in 2010, there were significant changes made in the reporting requirements for financial services organizations. Since the signing of Dodd-Frank into law, more organizations have been classified as banks, which means that more organizations are now required to report in a more consistent fashion to the Federal Reserve and other regulators. This has raised significant challenges for financial services organizations, as the rate at which they are required to report information and the volume of data that needs to be presented has increased greatly.

For example, for FR Y-10 and FR Y-7 reports, the Federal Reserve requires that ownership and changes be certified for accuracy and completeness prior to being reported. This necessary process presents multiple challenges to global financial services organizations. For example:

1) Since employees are geographically dispersed and their knowledge of Federal Reserve requirements can, at times, be limited, the first challenge is implementing an effective process to get the necessary information collected, organized, reviewed and certified in the required time frame.

2) The second challenge stems from the issue of employee turnover, which is present in every organization around the world. Many legal and compliance departments don’t have a strong enough knowledge-sharing and information continuation plan in place; therefore, an organization may not know that the “record manager” in a particular jurisdiction has left and that the new individual in the position may need to be made aware of the urgency of collecting and certifying changes to ownership, as required by the Federal Reserve.

As financial organizations progress in developing their risk management, internal audit and compliance practices in response to the increases in regulation, the need to invest in a more automated solution to improve accuracy and efficiency arises. The primary purpose of a potential software platform to fill this need is, therefore, to automate much of the work associated with the management, tracking and certification of changes to ownership on a global scale. To mitigate risk and improve throughput, automating compliance activities creates more effective and efficient global corporate governance practices.

In the scenario detailed above, what if for each Federal Reserve reportable entity, one could automate the process of monthly review and certification for accuracy and completeness? This process could include a highly detailed email outlining the exact actions your organization wants that individual reviewer to take. What if this automated solution could provide prescriptive guidance on the exact data that needs to be entered, along with identifying missing data? Finally, imagine if this platform could identify whether a person is no longer responsible for an entity or group of entities and escalate this change up the management chain to ensure that the appropriate individual has responded for each entity.

The goal of implementing an entity management software solution is to improve operational efficiency across a multitude of key internal stakeholders and teams in order for businesses to demonstrate good governance and to ensure that the right practices are carried out to effectively make the right decisions in a timely way. Blueprint, the global leader in entity management software, is utilized globally by a variety of financial services organizations. Blueprint is unique in the breadth, depth, accuracy and precision of the information that can be stored about an entity.  For financial organizations, this is demonstrated in many ways:

  • Shareholding transactions around the world. Blueprint precisely records country-specific transactions of shareholdings. Blueprint also uniquely calculates ownership percentages directly from share ownership.
  • Company types by jurisdiction, such as Unlimited Liability Companies in the UK.
  • Properly recording Economic Interest.
  • Reporting on Beneficial Ownership.
  • Deep integration of filings around the world. For instance, Blueprint fills and files all pertinent UK forms.
  • Graphic organization charts.
  • Alerts and notifications are automatically sent based on changes. For instance, a change in ownership can automatically send an email to the people who need to know.
  • Periodic (monthly, quarterly, annually) review of ownership and ownership changes with certification for accuracy and completeness.

Within global financial services organizations, this breadth and depth means that local users can rely on Blueprint as their single source of information and are not forced to keep entity information in a Microsoft Word document or Microsoft Excel file to adhere to local requirements. This is also better for the global organizations since disparate systems force manual reconciliation and create unwanted risks associated with maintaining multiple data sources.

_______

This article was written by Robert Lakomski. For more than 18 years, Robert has focused on the entity management software space and how organizations can drive better operational efficiency for their legal and compliance departments. For the last 14 years, Robert has been the Regional Sales Director at ICSA Software North America, now known as Blueprint OneWorld, the leader in enterprise governance management.