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How we assess regulatory change

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Our customers expect and trust AQMetrics to identify and react to all relevant emerging regulatory changes that affect the compliance of their firms. Prospective and current customers often ask us to share how AQMetrics identifies and manages regulatory change. In this first blog, we look at how we assess regulatory change. In our subsequent blogs we will look how this change is managed.

AQMetrics has a centrally managed function, led by the Head of Compliance, which is responsible for monitoring new regulations and changes to existing regulations. The AQMetrics Head of Compliance is approved by the regulator as a pre-approved control function, responsible for the monitoring and management of regulatory change.

As a regulated entity, AQMetrics receives notifications when new regulations are being considered. Typically, we will commence analysis 18-24 months in advance of a significant change. Further, AQMetrics follows regulations from the consultation process forward reviewing initial versions of technical guidelines from the regulators and posing questions to the regulator from the initial stages forward. When AQMetrics delivers solutions for a new regulation it requests access to the regulators test system in advance of them being made available. This ensures that AQMetrics works closely with the regulators technical personnel to test and quality assure its new regulatory change in advance of going live.

AQMetrics tracks multiple sources to identify regulatory change including the following organisations:

  • Global financial regulatory authorities, in each jurisdiction including ESMA, CBI, FCA, AMF, BaFin, CSSF, AFM, SEC, CFTC, NFA, FinCEN, FINRA, FDIC, MAS
  • Other legislative authorities, e.g EIOPA,
  • Central banks, including BoE, ECB, EBA, DNB
  • Government finance ministries
  • Tax authorities, including HMRC and IRS
  • Industry associations, including AIMA, IA, SIFMA
  • Expert working groups, including the EDM council
  • Specialist legal firms

Information is pulled directly from these sources, via automated updates, Q&As, direct consultation and workshops. Where required, AQMetrics seeks independent legal advice from legal regulatory experts in each jurisdiction, when assessing the regulatory change. This was recently required in light of Brexit, requiring AQMetrics to undergo authorisation with the FCA once passporting of services no longer applies.

In our online compliance risk portal, AQMetrics identifies all regulatory developments that may impact our customers compliance, including regulations currently addressed by the AQMetrics automated platform, and new regulations yet to be implemented. The risk portal tracks the following information:

  • Regulatory developments emerging across different jurisdictions,
  • Legislative analysis of these regulatory changes (third-party legal analysis is obtained, where required)
  • Impact assessment of the regulatory change on both the firm and the AQMetrics platform
  • Recommended safeguards and controls to preserve compliance
  • Quantitative scoring system is used to assess the weight of the relative impact of the regulatory change to our customer base, according to their authorisation status and jurisdiction
  • Implementation plan to address compliance requirements (see further information below)
  • Cost to address regulatory risk / compliance requirement
  • Workflow to identify regulatory change owner, authorisation of the change and associated tasks / responsibilities

AQMetrics has implemented a robust change control framework to identify and manage changes of all types, including regulatory changes. This allows AQMetrics to effectively pre-empt and respond, not only to ongoing current and emerging changes, but also to ensure the organisation and our stakeholders are adequately prepared for future changes.

In our next blog, we will look at the processes for implementing regulatory change.

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