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

Custody Concerns Continue

You timely filed your Form ADV within 90 days of fiscal year end, but did you properly answer all the questions related to custody? Not surprisingly, the Form remains confusing for many advisers, as does application of the Custody Rule itself. The SEC has issued guidance, letters to the industry, alerts and FAQs, but things … Continued

Blockchain Isn’t Hot Sauce

Guest post by Samson Williams, Partner – Axes & Eggs and Keynote Speaker – Ascendant CSS Spring 2019 Conference  I started telling people that blockchain isn’t hot sauce in mid-2017 to help explain why initial coin offerings (ICOs) were just the latest form of unregulated, online gambling. In November 2017, with Bitcoin nearing a high … Continued

The Importance of Effective ADV Disclosure: Staying Ahead of the Regulators

This ComplianceCast will discuss how firms can mitigate risk by having effective disclosure in their Form ADV Brochure. Our panelists will be CSS Ascendant Senior Consultant Ariana Monchick and Jessica Matelis, Partner at Foley & Lardner and former Senior Counsel at the SEC Division of Enforcement. They will discuss: Required disclosures The types of conflicts … Continued

Regulation Best Interest, Cybersecurity Top Concerns at IAA 2019 Compliance Conference

The Investment Adviser Association (IAA) represents the interests of investment advisers in Washington D.C., and the IAA Investment Adviser Compliance Conference 2019 was a forum for the discussion of future potential rulemaking. Cybersecurity and Fiduciary Rule considerations were headline topics, with custody and marketing right behind. The following is a summary of key issues discussed … Continued

The Challenges of Building a Global Compliance Program

Compliance programs face challenges in balancing global requirements with local exceptions while incorporating the fast pace of regulatory change, addressing critical business needs and obtaining the necessary resources necessary to manage the program. Trends and thinking on the subject were center stage at the recent CSS London event “Looking at the Year Ahead – Global … 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.