Compliance Software for the Financial Control Room


Managing a financial trading control room involves balancing a wide variety of tasks. To comply with the rules and regulations, all deals need to be carefully reviewed, the flow of information must be managed strictly, and there needs to be a focus on preventing conflicts of interest. All this work can take a long time to carry out, and a single deal can move slowly through the pipeline. 

What is a control room?

The control room is at the heart of the financial firm, and everything needs to run smoothly to produce optimum results and keep everyone happy. However, with the difficulty of managing compliance in the control room, it's certainly not easy to ensure compliance is carried out effectively.

Control Room Management

Fortunately, there is a solution available to make conflict management in financial trading control rooms easier to carry out. Compliance Control Room software is designed to automate conflict management, removing the need to rely on slow, manual systems that can lead to human error. The purpose of control room compliance software is to ensure the flow of information is managed effectively and investment banking deals and private transactions can be quickly reviewed and checked for conflicts of interest. By using compliance software, control room managers can more easily manage MNPI and insider lists, as well as research activities. At the same time, the software makes it possible to capture a complete compliance review, making it possible to manage auditing and regulatory reporting from a single platform.

Problems Addressed by Control Room Software

A Control Room Software addresses a broad range of issues that can arise from managing financial deals.

Some of the problems that it's possible to address using control room compliance software include:

  • Slow deal reviews due to reliance on manual processes
  • Deal lifecycle process bottlenecks
  • Human error and neglect
  • Lost revenue due to damaged reputation
  • The need for employee tracking
  • Tracking deal statuses, MNPI, wall-crossed members and multiple insider lists
  • Poor integration with other tools, such as personal account dealing systems
  • Dissatisfaction among control room staff

In a busy control room, it's essential to be able to control the organisation's information barriers and keep them strong. The flow of confidential information between private and public-side businesses needs to be effectively managed, while at the same time all deals need to be reviewed to prevent conflicts of interest. Managing many businesses and transaction types when relying on manual processes can quickly lead to severe delays. As a firm grows, offering more services, the risk of conflicts of interest is larger too and becomes more difficult to manage.

It can take hours or sometimes days to review each deal against several different things, including other deals, portfolio holdings, employee trading and holdings, and more. The challenge of managing information that is held across various systems can lead to human error and dealing with any mistakes can further delay the review of deals. The Market Abuse Regulations requires the tracking of wall-crossed employees and corresponding insider lists but keeping up with these requirements can be difficult.

Compliance software such as MyComplianceOffice provides a host of tools and features that bring a range of functionality together. One software suite can be used to manage many essential processes that need to be carried out within the control room. Integrated solutions take care of major processes, allowing control rooms to automate conflict management and always ensure the responsible management of data. Bottleneck problems can be solved by making deal reviews and other tasks much faster using automation, rather than relying on manual processes by small teams.

Deal Review Management

The use of control room software can automate the entire deal lifecycle review process. Managing potential conflicts of interest is essential for compliance when reviewing investment banking deals. Deal Review Management (DRM) software such as MCO automates the deal review process, capturing the details of investment banking deals. The software can be used to identify private and public firms, including subsidiaries and exchange traded securities. When a deal is made public, it makes it simple to submit, review and approve wall crossings and wall cross backs. DRM software forms a key part of Know Your Transactions tools, an essential part of identifying risky transactions and unusual behaviour.

Deal Review Management can be integrated with other compliance systems, such as personal trading and outside business activities. This enables a variety of compliance issues to be taken care of in one place. Compliance reviewers can easily access potential employee and firm conflicts so that they can be dealt with appropriately. Any disclosures that should be employed within a deal can be defined and communicated to the necessary people using DRM software. Using the comprehensive solution offered by this type of software, communication between the compliance review team and deal team can be audited too.

Insider List and MNPI Management

As part of Know Your Transactions, appropriate insider and MNPI (material non-public information) management is vital. It's essential for financial trading firms to follow the guidelines set out by regulators relating to the sharing of MNPI among corporate insiders. Selective insider sharing is much easier with the use of a control room software in financial services. There are many different types of information that needs to be stored and maintained, as well as being accessible when requested by regulators. Many control rooms have relied on manual methods to keep these important records, but this approach can waste time, cause disorganisation, and lead to errors.

Using MyComplianceOffice, it's possible to create insider lists more easily. They can feature essential details, such as names, roles and rights, assignments rules for accessing inside information. The software enables the creation of a hierarchical database of security listings and company information, which can be cross-referenced. It takes mere minutes to create these lists so that permissions and access can be managed in accordance with regulations. Compliance software allows for people in different roles to be managed easily, including investment and deal team members, compliance professionals and senior executives.

With purpose-built compliance software, it is possible to use standardised data management formats for sharing insider lists. This means that regulatory guidelines can be followed automatically, whereas using spreadsheets or other manual solutions don't allow for this easy management of insider trading lists.

Integrations with Other Tools

One of the top benefits of compliance software in the control room is that it can be integrated with other key tools. Compliance software can be integrated with personal account dealing systems, gifts and entertainment tracking, and other essential pieces of software. Seamless integration helps to provide full oversight in real-time, allowing for the monitoring of all key information required for managing deals.

As well as integrating with other compliance tools, control room compliance software can work together with other necessary tools in different departments. Connecting Deal Review Management and your Gifts and Entertainment software, along with HR and expense systems can provide deeper oversight. Compliance software is extremely useful in the control room of financial firms, but its uses can also be extended to other areas of the organisation for complete control over compliance.

Summary of Benefits

Compliance software delivers a broad range of benefits in financial trading control rooms. For anyone looking for the best solutions to improve efficiency, productivity and even profitability in the control room, the tools and features offered by control room software provides an effective way to manage the flow of information.

The top benefits offered by control room compliance software include:

  • Automate the entire deal lifecycle review process, including reporting, deal review management, conflict checking, insider list management, MNPI review, wall crossing approvals, and workflow
  • Remove the burden of employee tracking
  • Review company deals in minutes, compared to hours or days without compliance software
  • Receive fast updates on deal statuses from bankers
  • Automate MNPI tracking, wall-crossed members and multiple Insider Lists
  • Integrate with personal account dealing systems and other key compliance tools
  • Improve the conveyance of information to bankers with fast and efficient communication
  • Execute more deals thanks to automated, faster processes and bring in more revenue

Learn how Camille and her team addressed challenges with MCO's Compliance Control Room Software.

HubSpot Video

Financial trading control rooms are fast-paced, busy environments, where many different processes need to be monitored and managed. Purpose-built software that is designed for improving compliance makes a significant difference to how efficiently any control room can be run. With automation from compliance software, financial organisations can save time, boost profits, and ensure they follow the strict requirements set out by regulators.

Manual processes can't be relied upon in the control room, particularly when it gets busy and tasks begin to pile up. Compliance software provides key personnel with the tools that they need to manage their workload more easily. Human error is reduced and any problems that do occur can be dealt with more quickly and easily. Any control room that needs to be brought under control needs compliance software to improve all its operations and ensure compliance throughout all processes and at all levels.