Helping clients navigate the complexities of operating in an evolving regulatory and global landscape.
DHG's Regulatory Solutions and Risk Management Practice assists financial services institutions in managing and implementing change driven by new regulations and strategic risk management objectives. We deliver comprehensive compliance solutions to help ensure regulatory compliance, appropriate response to matters of non-compliance and integration into existing risk management frameworks. We work with Fortune 500 financial services institutions to evaluate risk management frameworks and processes and develop frameworks for new lines of business.
Our Regulatory Solutions team is comprised of professionals with cross-functional experience that work with clients around the world to create solutions that align with unique business strategies, risk profiles and organizational cultures. We have deep market and industry knowledge that is enriched by our position as a trusted advisor to many global banks, insurers and asset managers.
The reserve computation is performed weekly to identify customer related payables and receivables, when payables exceed receivables, the amount is reserved in a special bank account that is to be used exclusively for the benefit of customers. The weekly computation along with possession or control requirements is intended to protect customer assets. Due to the fluctuation of the markets and the variability of customer activity, performing a weekly computation could leave the broker dealer in the position of having to self-fund the reserve requirements in the seven day period between the computations. Due to this potential liquidity issue, many firms would like the ability to perform the computation on a more frequent basis so as to have the reserve deposits more closely represent the net customer payables. The process for computing the weekly reserve requirement is scaled based on client complexity, but typically involves several staff members gathering and analyzing data to explain variances and consolidating into a computation schedule. The process not only involves the regulatory reporting staff but various groups within brokerage operations. These computations are thoroughly examined by the regulators and under new SEC requirements, any shortfall in the amount reserved would be noted in the firm’s annual financial statement filings.
Increasing employee engagement through education and heightened awareness of applicable regulatory requirements.
An efficient Regulatory Reporting Group can save your firm time and money. Staffing of open positions can take months and special projects often leave regulatory groups with interim staffing needs. By having knowledgeable interim resources available to your firm, you can feel assured that the regulatory requirements are being satisfied while your permanent staff are consumed working on firm initiatives.
Reviewing processes to provide guidance on regulatory compliance weaknesses and/or gaps and making recommendations for process improvements.
During 2013, the SEC released amendments to Rule 17a-5 which require a carrying broker dealer to file a compliance report with their annual financial statements. The compliance report states that the firm was in compliance with certain financial responsibility rules that deal with customer protection and adequate capitalization of the broker dealer. The firm’s independent auditor must examine certain statements in the compliance report to ensure accurate representation.
Using our experience in the Rules to help firms develop and implement controls to facilitate compliance with the requirements.
Provide training to broker dealer staff on the requirements to aid compliance.
In most change initiatives, organizations often create a team of subject matter experts that will define or re-define how work processes will be performed. The new/revised process will then be communicated to employees to “own” and bring about the results anticipated. While many organizations have the subject matter experience to perform the new functions, they may lack the ability to effectively manage the implementation of the new/revised process.
Providing thorough project management structure which establishes a viable and executable plan and status reports. The project plan identifies project objectives, results, known challenges, dependencies, tasks, milestones, ownership and target completion dates.
Training staff on the requirements of the new/revised process.
A policy documents a guiding principle for an organization such as an Enterprise Risk Management Policy which would describe the overall enterprise framework and risk strategy. A procedure is a “how to” document which explains the necessary steps that should be followed to complete a task. A procedure answers the questions of what is the process and how the process is completed. Written documentation allows for consistent treatment across the organization and also helps to create an internal control framework. The internal controls, along with periodic control effectiveness testing, provide management with assurance that the firm’s objectives are being met.
In the brokerage industry, formal training and education programs exist for stock brokers. Outside of the formal registered representative training programs, many firms have a need to train employees on regulations and brokerage processes that are critical to the firm.
Developing specific learning objectives that foster employees understanding of the regulations.
Customizing training to each firm including using the brokerage systems to comply with requirements.
Providing a consistent methodology of training for the entire organization.
Clients rely on DHG’s Regulatory Services practice for team-approached expertise in the implementation of the Basel Regulatory Framework. Our vast experience within the regulatory field, as well as in finance process and transformation, helps our clients confront the inevitable application of complex regulations into institutional technology infrastructure.
Serving a diverse group of financial services institutions, DHG’s familiarity with key stakeholders of the Basel Regulatory Framework within banking organizations of all sizes enables our team to offer a comprehensive cross-functional solutions tailored to each of our clients.
DHG offers independent risk assessments designed to help identify gaps in areas that need improvement to be compliant with the FFIEC BSA AML Exam Manual. We can also assist in implementing changes to remediate the identified gaps. Our experienced consultants can conduct the assessment and provide resources for implementing recommended actions.
Policies and procedures must meet two goals: (1) remain current with changing regulations and industry best practices; and, (2) be accessible to and used by employees in all lines of defense. DHG can help you assess the current state of your policies and procedures and design the enhancements you need for this critical component of your BSA/AML and OFAC compliance programs.
DHG can help your company conduct historical transaction reviews in response to inquiries from your respective regulator, perform extensive reviews of transactions, identify recommendations related to suspicious activity, and assist in Suspicious Activity Report (SAR) preparation.
DHG can help you meet your obligation to conduct annual independent testing of your BSA/AML and OFAC programs. We have consultants with experience in tailoring an effective testing program, testing in a constructive way and documenting the results in a manner that promotes program improvement.
DHG can provide customized training materials, and deliver the training to senior executives, senior management and employees on topics ranging from compliance with regulatory requirements, emerging risks, and trends within the industry.
In the aftermath of the global financial crisis, liquidity regulation and risk management has become a key area of focus for financial institutions. Under Basel III, new liquidity requirements include the Liquidity Coverage Ratio and Net Stable Funding Ratio, as well as specific metrics for monitoring and reporting. In addition, the Federal Reserve’s Comprehensive Liquidity Analysis & Review (“CLAR”) has become part of prudential regulation which includes a detailed liquidity stress test and analysis.
Serving a diverse group of financial institutions, DHG’s familiarity with key stakeholders in Treasury, ALM and liquidity risk management within banking organizations of all sizes enables our team to offer comprehensive cross-functional solutions tailored to each of our clients.
Recovery and resolution planning has become a critical component in the macro and micro-prudential regulation of large banking organizations and Non-Bank SIFIs. The recovery and resolution plans (RRPs) developed by these companies provides regulators, and other stakeholders, information related to how a company would persevere through a severe stress or be unwound in an orderly way, if recovery was not achievable. The RRP process is highly complex and includes collecting and analyzing data points related to the company’s business, organizational structure and operations across the organization, analyzing their interconnectivity and creating a plan that addresses the challenges to recovery or resolution that these interconnections create.
The Regulatory Reporting requirements for financial institutions have increased in this post-2008 financial crisis environment, and have become a more heightened area of focus. The Dodd-Frank Act initiated more stringent and granular reporting requirements.
Serving a diverse group of financial institutions, DHG’s familiarity with key stakeholders of Regulatory Reporting organizations within a variety of banks enables our team to offer comprehensive cross-functional solutions tailored to each of our clients.
An effective and robust risk and control assessment process (“RCA”) is crucial to the sustainability of any line of business within a financial institution. DHG has experience in the design and execution of risk and control assessments and works with clients to embed RCA into firm’s governance, risk and compliance framework.
DHG provides a comprehensive suite of stress testing and capital planning services to our financial services clients. We have direct experience in assisting large, global organizations in developing strategic and tactical solutions to address the multi-faceted requirements stemming from the Federal Reserve Comprehensive Capital Analysis & Review (CCAR) and Dodd-Frank Act Stress Test (DFAST) regulations. Our team members have executed engagements across all components of the capital management and stress testing processes and have deep experience in understanding the requirements and expectations for CCAR and DFAST.
Every entity faces challenges and unknown factors that may negatively impact value to their stakeholders. A comprehensive Risk Management Program is one discipline that enables management to effectively handle the uncertainty and opportunities that arise during the course of meeting entity objectives. Generally, Risk Management is an iterative strategic process which occurs across an entity for identifying, assessing, prioritizing, remediating and managing different types of risks. DHG Risk Advisory services provides industry specific experience in the following components of Risk Management.
Vendor management is a multi-functional process involving elements of the IT, legal, compliance, risk management departments and the service line leader.
Risks from vendors and suppliers pose a significant challenge to businesses today and effective vendor management is key to an organization’s success. This is especially true for highly regulated industries such as financial services and healthcare.
DHG’s Vendor Management Services offers full turnkey third-party program development, including standardization and documentation of processes, policies and controls. Our services address business needs and regulatory compliance, helping to maximize opportunities leveraging third parties and minimize the significant and costly risks that are part of vendor management.