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Are you meeting your Dodd-Frank compliance obligations?

Are you meeting your Dodd-Frank compliance obligations?

The Dodd–Frank Wall Street Reform and Consumer Protection Act is a US federal law enacted in 2010 that overhauled financial regulations with the aim of preventing the financial crisis from occurring again. While it does not directly apply to Asia and Singapore, organisations in the region still need to ensure they comply. What do you need to do and how can Touch help?

The Monetary Authority of Singapore (MAS) took on the Presidency of the Financial Action task Force (FATF) on 1 July 2022, a position it will hold for two years. During that time, MAS has been actively driving effective global implementing of the FATF standards, including improving asset recovery and AML/CFT controls on virtual assets service providers (VASPs) and digital payment token service providers. 

MAS has also been responsible for driving further changes to global AML/CFT standards, including enhancements to promote the transparency of beneficial ownership for legal persons. It means two things: Singapore is leading the way in promoting safe and effective financial controls, but on the downside organisations in the region must uphold strict financial standards while adhering to a growing raft of international compliance obligations.

Businesses in Singapore and the surrounding region are subject to numerous compliance requirements around personal data and financial transactions, including, Singapore’s Personal Data Protection Act (PDPA), which brought complex new obligations for organisations regarding the collection, processing and storage of personal data.

That complexity is made worse for organisations operating across such a wide area, with each region having its own version of each regulation. For example, Thailand and Malaysia have their own versions of the PDPA, so organisations operating in the region need to comply with a number of different versions of the act.

Business in Singapore face multiple, often complex, compliance obligations

MiFID II, meanwhile, was enacted in 2018 by the European Union to harmonise regulation for investment services across the European Economic Area (EEA). For businesses that operate in the investment and financial services industry it’s mandatory.

While it does not directly relate to Singaporean financial services organisations, many organisations are likely to either trade in the EEA through subsidiaries, or partners, while others will be involved in activities on behalf of partners in the EEA.

Under MiFID II, organisations need to record all forms of conversation, including those that take place on mobile phones and via digital channels, meaning that compliance with MiFID II has become increasingly complicated. Likewise, The Dodd-Frank Act does not cover Singapore directly. However, it is essential that all financial organisations ensure they comply.

How does Dodd-Frank impact me?

Financial markets around the world are so interconnected that the changes enforced in the US by the Act have an impact on almost all financial firms around the world – not just those based in the US. It includes public banks, small or private investment banks, private enterprises, and individual financial advisors – anyone involved in providing information or tools that could lead to a financial transaction.

It means that Dodd-Frank has a global impact that affects thousands of financial firms and advisors. Furthermore, before the Act, few UK and EU-based investment firms were registered with the Securities and Exchange Commission (SEC), as those with less than 15 US-based clients/customers were exempt from having to register with the SEC. Dodd-Frank removed that exemption.

The impact of this for Singapore and Asia-based organisations is that investment firms are required to register with the SEC, comply with all of the provisions of the Advisers Act and, notably, meet extensive record-keeping and reporting obligations for all registered – and some unregistered – investment managers and advisers. This is regardless of whether they are based in the US or not.

The previously unregulated swaps market also falls under the Act. A swap occurs when a customised contract enables the private exchange of cashflows, payments or financial instruments between two parties. Given that most swaps were private conversations between two parties, the market was left unchecked, lacking in transparency and relatively unregulated. Dodd-Frank now enforces the recording of all calls related to swaps, for obvious reasons.

Extensive call recording regulations now apply to almost every financial firm

It means that call recording became a major component of Dodd-Frank compliance with extensive call recording regulations now applying to almost every financial service organisation across the globe.

Any information or conversation that leads to a financial transaction must now be recorded and securely stored – including fixed and mobile phone calls, as well as other digital communications. All recordings must be consistently time-stamped, securely stored, and easily accessible on a WORM (Write Once Read Many) basis.

Given that it’s difficult to determine which coversations will lead to a transaction, Dodd-Frank essentially requires all conversations – across multiple channels ­– to be recorded and stored for the duration of the transaction (and for up to five years afterwards depending on the type of transaction).

Very few financial services organisations, large or small, have legacy systems capable of recording multiple channels and securely storing large volumes of recorded files in a structured fashion that allows quick and easy search/retrieval capabilities. Such an undertaking requires significant resources. That’s where Touch can help.

Touch Call Recording Service takes the headache out of Dodd-Frank compliance

Touch Call Recording Service is a fully managed, multichannel, call recording service. It requires no costly or risky hardware or software upgrades because voice recording capabilities are based in the network. The service covers more than 50 different channels, including fixed and mobile calls, SMS, chat, enterprise applications such as MS Teams, on-premise and hosted PBX integrations, and multiple financial applications, such as Bloomberg Chat and Refinitiv Messenger.

No integration work is required, and users can be on-boarded in a few clicks. The easy-to-use, intuitive Web-Portal offers comprehensive search and retrieval capabilities with all recordings searchable by multiple parameters. Every search is logged – by administrator, date, time, and search parameter – meaning that our service is tamper-proof, auditable, and transparent from the end user right through to the administrator.

It requires no user intervention – for example, if an advisor is recorded on a specific channel, or channels, then the call or communication is automatically recorded.

Touch Call Recording Service is a complete managed service that takes away the headache of regulatory compliance, including Dodd-Frank, MiFID/ MiFID II, PDPA, GDPR and other industry, local and international regulations. It’s highly scalable with no limits to the retention period and storage capacity, and can be adapted to new channels on request.

Furthermore, our own compliance and technology roadmaps mean that our service remains compliant with any amendments to regulations, or any new obligations that are introduced in future. Our motivation is to remain at the cutting edge of technological excellence.

Touch Call Recording Service guarantees that financial organisations of any size can meet their Dodd-Frank compliance regulations, as well as all the others obligations they face. Get in touch now, to find out how we can help.

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