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Asset Managers Adjust to SOX After Year One, Union Bank California Deploys Anti Money Laundering Solution

SOX Year One: How to Cut Costs, Union Bank California Implements SearchSpace AML Technology

Saving Money With SOX

Compliance with Sarbanes-Oxley has been a considerable cost burden on the investment management industry, but after a year of working to stay within the limits of the regulation, firms are beginning to uncover methods of offsetting some of the expense.

A new TowerGroup report reviewing the impact of SOX on the asset management industry indicates that many managers have emerged from the first year with new and useful data on their internal processes. This data will allow the cost-conscious investment managers to improve the efficiency of key business areas.

In the first year of SOX compliance, implementation of the new regulatory framework was pricey, the report states, and spending on internal and external audit functions will continue to rise. However, TowerGroup believes that compliance with Section 404 of SOX – which requires the annual assessment of the effectiveness of internal control structures and procedures – will reveal deficiencies, which in testing, addressing and reengineering will ultimately allow investment managers to realize cost savings.

In order to tighten internal controls and establish an audit trail, more businesses will be forced to automate a significant portion of their remaining manual trading processes due to the difficult, if not impossible, nature of auditing them. Investment managers will be looking to pretrade portfolio compliance and trade order management systems with configurable business rules and fast response times with this effort in mind. Further, post-trade automation will become a priority as processes such as trade matching, portfolio accounting, allocations and reconciliation are all impacted by SOX regulation.

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Stressed Out by Compliance, Reputational Damage & Fines?
Stressed Out by Compliance, Reputational Damage & Fines?
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