A prominent security services firm that forms part of a French multinational investment bank and financial services company asked Lysis to assist with the securities/back-office function within the multinational investment bank.
Investment and Asset Management
Governance & Compliance Framework/ Section 166/ SMCR
The client asked Lysis to assist with the securities/back-office function within the multinational investment bank and financial services company and the challenge for this firm was twofold (a and b):
Challenge A: Changes to the market abuse legislationThere were amendments to the market abuse regulations and the firm needed to understand what adjustments were required for their existing processes to meet the new compliance requirements.
Challenge B: The client required expertise to support their Money Laundering Reporting Officer (MLRO)
Solution A: Lysis analysed the requirements of the new legislation and compared those to the previous legislative requirements to identify the exact changes and mapped these changes according to the firm's unique business activities. This was followed by a gap analysis to identify which processes remained compliant and which processes needed to change to ensure compliance.
Solution B: Lysis provided this support and took on the assessment of new firms, as customers, in the back end to determine how effective their AML controls and processes were. This meant that the front-end French multinational investment bank and financial services company could focus on their investment strategies while Lysis assisted in the background to vet their clients since all the data would reside on the security services firm's systems as a back-end process for settlements, processing dividends etc.
In essence, there was a need to understand what level of comfort/risk they could tolerate from the firms that came onboard in terms of these firm's existing AML controls. As a result, Lysis reviewed all the new customers' (firms) AML governance, frameworks, policies and formed an assessment of each firm's level of risk regarding the mentioned criteria. This included interviewing key personnel from the firms' compliance functions. This was a very detailed forensic analysis of each firm to really understand the strength of each firm's AML controls.
Outcome A: The firm amended their processes according to the recommendations made by Lysis and therefore remained compliant.
Outcome B: Lysis captured their findings in a report which detailed each firm's AML strengths and weaknesses and how to addresses challenges. In a way this is very similar to Enterprise-Wide Risk Assessments and Financial Crime Risk Assessments that Lysis conducted for other clients with the key difference being that these assessments were conducted on a third party where less information is available, but a review is still required.
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