FinTech, Briefly Frozen by DOL Rule, Is Hot Again

The unsure nature of the Department of Labor Fiduciary Rule effectively perplexed many investment advisers in the months following the election of President Donald Trump, with many paralyzed by the murkiness regarding whether he would or wouldn’t scrap the rule.

After a brief delay, part of the rule went into effect on June 9, although the DOL announced an intention to continue its review in a move that could portend additional future changes.

With a glimpse of improved clarity however, has come action. According to InvestmentNews.com, even the partial implementation of the rule has caused a skyrocketing in demand for technological answers to meet the fiduciary rule requirements.

One firm that offers FinTech solutions characterized the burst of activity as “a tidal wave of interest.” Another has seen a 40% increase.

The numbers show that firms are embracing technology-based solutions to their compliance challenges. This mirrors the trends with the regulators, as well; the SEC has spent heavily in big data technologies over the last several years, and within the last month, its Acting Director and Acting Chief Economist of the Division of Economic and Risk Analysis Scott W. Bauguess noted that improved artificial intelligence technology has bolstered the SEC’s capabilities of spotting potential wrongdoing.

In its 2018 budget request, the SEC’s No. 1 bullet is to “us[e] leading technologies to support our economic and risk analysis functions and permit the SEC to better keep pace with the entities and markets we regulate.” The takeaway is clear: neither regulators nor compliance officers can expect to effectively detect 21st century fraud with 20th century technologies.

Ascendant emphasizes to clients the importance of embracing technology in their compliance programs. We recommend you review your roadmap for the next two years and ensure your executive team is aware of the importance of investing now in an efficient and tech-enabled compliance program, for DOL and beyond.

For compliance with the DOL Fiduciary Rule, Ascendant’s proprietary tool, ACM, offers policy and checklist templates, along with a framework to distribute training materials to your entire staff. Ascendant’s ACM Trade Blotter Manager also offers an opportunity to move compliance officers at investment firms out of a manual, Excel-based testing model into a robust post-trade compliance engine and data analytics platform that detects, prioritizes and mitigates operational and compliance risks derived from trading activities.

For more information on how we can help you automate your compliance program, contact us.

Related Content

Latest Content

How Do You Supervise for SEC Pay-to-Play Violations?

If you wanted more information about the contours of the SEC’s Pay-to-Play Rule, or how the SEC may enforce it, three recent Settlement Orders against large investment advisers for “over de minimis” political contributions provide some insight regarding one of the prohibitions: Contributions by Covered Associates to certain Government Officials over the specified Exception amount (capitalized words are terms in the … Continued

Do your Fund Documents Clearly Disclose Receipt of Accelerated Monitoring Fees?

Somewhat more reminiscent of the broken-windows enforcement era, two affiliated private equity advisers managing billions settled with the SEC on charges that they failed to make pre-commitment disclosures in fund governing documents related to accelerated fees received from portfolio companies. Interestingly, according to the Settlement Order, the advisers had made some disclosures in fund documents … Continued

With New Risk Alert, SEC Doubles Down on Best Execution

On July 11, 2018, the SEC issued a Risk Alert outlining commonly found compliance issues related to best execution by investment advisers. Advisers have an obligation to seek best execution of client transactions, taking into consideration quantitative factors such as execution quality and commission rate, as well as more qualitative factors such as the value … Continued

The Cost of Compliance: Understanding and Leveraging Resources

For compliance officers, obtaining the necessary tools and resources to build an effective compliance program can be costly and difficult to implement. How do you distinguish the best in class, the most cost-efficient and effective for use in your program? In this ComplianceCast, speakers David Porteous of Faegre Baker Daniels and Korrine Kohm of Ascendant … Continued

California Privacy Law Brings GDPR-Lite to the U.S.

New Act Will Give Consumers Rights to Access and Delete Their Data In what has become an ongoing race among states to have the toughest privacy regulation in the U.S., California has jumped to the front. On June 28, 2018, California’s legislature unanimously passed a privacy bill that was later signed by Governor Jerry Brown, … Continued

Mailing List

Subscribe to the Ascendant Compliance email list for the latest compliance resources, conferences, ComplianceCasts™, and more.

Loading form...

Contact Us

Ascendant works together with clients to identify and assess critical needs through customized plans. If you need assistance with compliance functions, regulatory services, cybersecurity or technology tools, we’d love to speak with you.