Reg BI Surveillance Leverages NICE Actimize’s Sales Practices and Suitability, Communications Surveillance and Case Management Capabilities to Provide One Solution to Automate Key Reg BI Compliance Processes
In a watershed moment, the US Securities and Exchanges Commission voted on June 5, 2019, to pass Regulation Best Interest (Reg BI). The regulation, which is scheduled to take full effect on June 30, 2020, goes beyond existing suitability regulations to raise the standard of conduct for U.S. broker-dealers, imposing new requirements to ensure firms are transparent and act in their clients’ best interest. To address this, NICE Actimize, a NICE business and the leader in autonomous financial crime management, has introduced Reg BI Surveillance, a comprehensive solution designed to help broker-dealers manage their Reg BI compliance obligations.
NICE Actimize Introduces Innovative Reg BI Surveillance Solution to Help Organizations Comply with SEC’s New Regulation Best Interest
A multi-faceted regulation, Reg BI imposes a number of obligations on broker-dealers, including requirements to: provide timely disclosures to retail clients; exercise diligence (care) in making investment recommendations in line with each client’s best interest; and to maintain and enforce compliance procedures. NICE Actimize’s Reg BI Surveillance helps firms address each of these key obligations through a single solution.
Chris Wooten, Executive Vice President, NICE, stated, “Reg BI is the most significant change to suitability regulations in the United States in the past twenty years. Now, firms must monitor all broker-dealer recommendations through the lens of this new regulation. This places an enormous compliance burden on firms that would be difficult to overcome with today’s disjointed technologies and manual processes. As a comprehensive, integrated, turnkey solution, NICE Actimize’s Reg BI Surveillance is an all-in-one solution that automates compliance processes so they’re easier to manage, enabling firms to meet various obligations under Reg BI.”
Greg O’Gara, Senior Research Analyst, Aite Group noted, “The NICE Actimize solution uses a unique combination of trade and communication controls with their proprietary natural language algorithms to ensure brokers remain compliant with Regulation Best Interest. This is a highly targeted digital platform that will address the significant challenges presented by this new regulation.”
Sales Practices, Surveillance Solutions Leveraged
Unique to the market and offered as an on-premise or cloud-based solution, Reg BI Surveillance leverages NICE Actimize’s market-leading sales practices and suitability, communications surveillance and case management capabilities to help firms address their disclosure, care and compliance obligations under Reg BI through a single solution.
- Disclosure Obligation: Using Intelligent Analytics powered by machine learning and Natural Language Processing (NLP), Reg BI Surveillance monitors and reviews all broker-dealer communications (e-mail, voice and attachments), automatically identifies communications containing recommendations, and then analyzes prior communications to determine if proper disclosures were made and presented in compliance with the regulation. Risky communications are automatically flagged, scored and prioritized for review. With the click of a button, analysts can see disclosure compliance scores and also review every communication leading up to a recommendation or trade.
- Care Obligation: Reg BI Surveillance leverages powerful out-of-the-box analytics that can detect prohibited sales practices, and analyze transaction risks, rewards and costs to determine if the broker-dealer is acting in the client’s best interest. Complete communications and transaction data are automatically correlated and instantly available for each alert. Reg BI Surveillance even features a ‘Best Product Alternative’ analytics model which highlights more suitable products the broker-dealer could have recommended based on the client’s profile.
- Compliance Obligation: Using Reg BI’s case management capability, firms can create standardized workflows to manage Reg BI compliance enterprise-wide (complete with audit trails) and have one place for managing alerts and investigations. By automating compliance processes around Reg BI, NICE Actimize’s Reg BI Surveillance solution provides a foundation for standardizing procedures and ensuring they are followed.