Best Practices to implement a winning Compliance Program
The process for an effective compliance implementation has 8 simple steps:
Review, research & understand the requirements
Analyze operations & determine your compliance
3. GAP ANALYSIS
Identify & document gaps & remediation plans
Validate the changes (Initial & ongoing validations)
Review, research & understand the requirements
Train the staff (Rule requirements & operations)
Prepare evidentiary material to document your compliance
Demonstrate compliance to audit, regulators
Implement a winning Compliance program using Compliance Delivery Platform:
To implement a winning compliance project for Bank Secrecy Act (BSA), the regulated firm can use the BCube's Compliance Delivery Platform (CDP) to streamline their process and improve their results.
With the CDP's C-INTAKE, any regulation published in the Federal Register is structured at the section level, linked to supporting information and delivered through a simple user interface.
With single view screens to navigate through the information needed to evaluate the rule's requirements, you can develop compliant solution and create a best practice Gap Analysis using the C-GAP Manager. It even streamlines the process to execute a 3 lines of defense validation framework with built-in communication interfaces, audit trail and section specific access and approval controls.
A project survey is available for each CDP project, and can be purchased separately as a standalone without the C-Gap Manager. The survey can be customized to include your specific requirements and are based on the individual requirements in the regulation. Each survey is designed to help you quickly evaluate your compliance to a rule and provides a draft current state and suggested pillar level gaps. If purchased with the C-Gap Manager, once you are satisfied with the results of the survey, it can be automatically uploaded into the project's gap analysis. This will save you an estimated 2 to 3 hours per rule requirement and can easily return many times the cost of the subscription in time and effort.
The New FinCEN, AML Customer Due Diligence rule requires that your organization determine the Beneficial Owner(s) and at least One person who has “significant responsibility” for the managing the legal entity, whenever a person opens an account for a legal entity for any new account. A beneficial Owner is defined as one who has at least 25% direct or indirect ownership of a legal entity.
This rule requires any person opening an account, at a bank, credit union, broker or dealer in securities, a mutual fund, future commissions merchant, for a legal entity complete an appropriate form. It is intended to provide one of the four elements that the FinCEN identified as four core elements of customer due diligence (CDD). Explicit requirements in the anti-money laundering (AML) program include:
Customer identification and verification.
Beneficial ownership identification and verification.
Understanding the nature and purpose of customer relationships to develop a customer risk profile.
Ongoing monitoring for reporting suspicious transactions and, on a risk-basis, maintaining and updating customer information.
Financial institutions must conduct monitoring to identify and report suspicious transactions. Transactions that are not normally expected given a customer’s risk profile are used to identify such transactions. When a financial institution detects information (including a change in beneficial ownership information) about the customer in the course of its normal monitoring that is relevant to assessing or reevaluating the risk posed by the customer, it must update the customer information, including beneficial ownership information. This applies to all legal entity customers, including those existing on the Applicability Date. This provision does not impose a categorical requirement that financial institutions must update customer information, including beneficial ownership information, on a continuous or periodic basis. Rather, the updating requirement is event-driven, and occurs as a result of normal monitoring.
The rule was published on May 11, 2016 and is effective July 11, 2016 but institutions must comply by May 11, 2018.
The recent regulatory update titled Customer Due Diligencewas published in the Federal Register on 05/11/2016. It is effective July 11, 2016 but institutions must comply by May 11, 2018. It is now available in this project and the following section have changes:
The Part number in the regulation corresponds to a specific Business Unit and Section number corresponds to the AML Element. For example Part 1010.210 is the general AML template, Part 1020 relates to AML for certain financial institutions as shown in the chart below.
NAVIGATING to a specific Part Number is simple with the bCube Advantage. Simply display the project navigator and click on the desired part. The project navigator also allows you to quickly access and cross reference similar section numbers across Part Numbers so that you can gain visibility over the entire spectrum of your business lines.
Part# / Section#
Exempted anti-money laundering programs for certain financial institutions
Anti-money laundering program requirements for financial institutions regulated only by a Federal functional regulator, including banks, savings associations, and credit unions
Anti-money laundering program requirements for casinos
Anti-money laundering programs for money services businesses.
Anti-money laundering program requirements for brokers or dealers in securities
Anti-money laundering programs for mutual funds
Anti-money laundering programs for insurance companies
Anti-money laundering program requirements for futures commission merchants and introducing brokers in commodities
Anti-money laundering programs for dealers in precious metals, precious stones, or jewels
Anti-money laundering programs for operators of credit card systems
Anti-money laundering programs for loan or finance companies
Sections numbers relate to a specific AML topic. For Example a Section 320 applies to Reports of Suspicious Transactions. In part 1022 section 320 provides the requirements for the SAR specifically for “Money Service Businesses. In part 1024 section 320 provides the requirements for the SAR specifically for "Mutual Funds".
The bCube Navigators allow you to access any specific section in 1 click. Accessing similar sections across different business units is also easy simply select the appropriate Part and then click on the specific section. Refer to the table below to review the specific section numbers in the AML program to be implemented, to determine the specific topic. Note the bCube Advantage can also provide reporting across Parts numbers for a specific section. For example selecting section 306 for the various Parts for each of your business lines would show the status of your Report Filings (the section 306 topic) across your organization.
Part 1010 the General Section for AML is depicted the section number appears after the ".".
Exempted anti-money laundering programs for certain financial institutions.
Anti-money laundering programs.
Customer identification program requirements.
Beneficial ownership requirements for legal entity customers.
Determination by the Secretary.
Filing of reports.
Reports of transactions in currency.
Filing obligations for reports of transactions in currency.
Exemptions for non-bank financial institutions.
Reports of suspicious transactions.
Reports relating to currency in excess of $10,000 received in a trade or business.
Reports of transportation of currency or monetary instruments.
Reports of foreign financial accounts.
Reports of transactions with foreign financial agencies.
Reports of certain domestic coin and currency transactions.
Determination by the Secretary.
Records to be made and retained by financial institutions.
Purchases of bank checks and drafts, cashier's checks, money orders and traveler's checks.
Records to be made and retained by persons having financial interests in foreign financial accounts.
Nature of records and retention period.
Person outside the United States.
Information sharing between government agencies and financial institutions.
Voluntary information sharing among financial institutions.
Due diligence programs for correspondent accounts for foreign fin institutions.
Due diligence programs for private banking accounts.
Prohibition on correspondent accounts for foreign shell banks; records concerning owners of foreign banks and agents for service of legal process.
Special measures against Burma.
Special measures against Myanmar Mayflower Bank and Asia Wealth Bank.
Special measures against Commercial Bank of Syria.
Special measures against VEF Bank.
Special measures against Banco Delta Asia.
Summons/subpoena foreign bank records; End correspondent relationship.
Modifying or rescinding rulings.
Forfeiture of currency or monetary instruments.
Enforcement authority for transport of currency or monetary instruments.
Persons who may issue summons.
Contents of summons.
Service of summons.
Examination of witnesses and records.
Enforcement of summons.
Payment of expenses.
Access to records.
Rewards for informants.
Photographic or other reproductions of Government obligations.
Availability of information.
Exceptions, exemptions, and reports.
Dollars as including foreign currency.
So, the question is "Can you afford not to have the BCube Compliance Delivery Platform content solutions?"