Vestmark Introduces Comprehensive Compliance Solutions for Fee-Based Accounts

The platform’s scalable compliance engine evaluates a broad range of compliance rules and client restrictions in real time on a pre-trade basis to avoid costly errors and unintended trades before they happen. VestmarkONE includes detailed audit trails to confirm adherence to compliance policies and rules, and ongoing monitoring of compliance rules on a post-trade basis.

VestmarkONE provides a flexible compliance rule builder to construct a range of rules at the firm-level, the program-level, the product-level and for client investment policy statements. These rules can be defined against specific securities, security characteristics (for example, bond ratings), sectors and other groupings of securities, as well as portfolio diversification and concentration requirements.

For pre-trade compliance and restriction evaluation, compliance rules are evaluated on a real-time, pre-trade basis to reduce trading errors, and the associated cost and effort of correcting violations. 

All rules are evaluated nightly on a post-trade basis and on demand for fee-based accounts.

Specific constraints can be defined and enforced for adviser-directed programs, including which advisers can (or cannot) participate, eligible securities and diversification requirements.

(Cont’d)

Client-specific restrictions can be defined and enforced. Restrictions are evaluated before any trade, and alerts are available post-trade for any violations or changes. (For example, a held security added to a socially responsible investment restriction list.)

Each model portfolio defined by financial advisers, central investment teams and third-party specialists can have its own set of compliance and investment requirements. These rules are evaluated with each model update, and model changes can be subject to firm-defined approval workflows.

VestmarkONE’s compliance dashboard, a way to centralize monitoring and alerts for the home office, provides programwide alerts and streamlined identification of accounts and situations that require attention.

The platform includes detailed audit trails for every change on the system and all actions taken throughout the trade process. For nondiscretionary accounts, VestmarkONE has a built-in workflow that prompts advisers to obtain client consent and meets the Order Audit Trail System (OATS) data capture requirements. The system also maintains historical versions of accounts, compliance rules, portfolio models, and tracks changes and approvals.

For SEC-compliant trade recordkeeping, VestmarkONE constructs comprehensive audit trails to verify observance of all compliance policies and rules, maintaining SEC-compliant trade records.

“Due to unique scalability and functionality requirements, broker/dealers, banks, RIAs and other wealth managers have had limited compliance capabilities across their fee-based business lines,” said Rob Klapprodt, president of Vestmark. “VestmarkONE lets firms confidently grow their fee-based advisory business without unnecessarily increasing operating risk.”